Westpac brings forward RBA rate cut call to July from August

News

Commentary by the firm’s chief economist, Bill Evans

  • A pause between cuts might have allowed for a smoother transmission process
  • But cannot deny the explicit signals provided by Lowe’s more recent speech
  • Early days for interpreting Lowe’s language at a time when policy is active
  • Based on previous experience with other central bankers, the language is direct
  • As such, we now expect a cut in July that will substitute for the move originally expected in August

ForexLive

The RBA will meet again next Tuesday and currently, the cash rate futures indicate that there is a ~84% probability of the central bank cutting rates by another 25 bps at its upcoming meeting. I reckon that’s a real possibility after Lowe’s remarks last week here which gave rather firm signals of such a move.

They’re already behind the curve when it comes to acting on this matter so consecutive cuts is certainly not out of the picture.

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