August 09, 2024 at 01:30AM
Earlier this week Westpac pushed back their RBA rate cut call to February 2025, from previously in November 2024
Expects a conservative pace of 25bp cuts per quarter
New terminal rate forecast of 3.35%, up from 3.10% previously
RBA seen as more cautious, requiring stronger evidence before easing
Bank cites RBA’s new analytical tools and focus on full employment indicators
WPAC forecasts align with RBA on inflation, but more pessimistic on consumption
Risks: RBA could delay cuts further if inflation surprises to upside
Alternatively, cuts could come sooner if economy weakens materially
Key quote: “In wanting to be sure, the RBA Board is risking getting too far behind the curve, with inflation undershooting the target and unemployment rising further than strictly necessary.”
The bottom line: WPAC sees RBA as one of the last major central banks to cut rates, but warns of risks in both directions.
—
Current RBA:
This article was written by Eamonn Sheridan at www.forexlive.com.