Despite lower than expected inflation, economists don’t expect rate cuts to come into effect until at least September.
In this month’s Finder RBA Cash Rate Survey™, 41 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.
All 41 experts believe the RBA will once again hold the cash rate at 4.35% in March.
Graham Cooke, head of consumer research at Finder, said the cost of living crisis may be nearing its conclusion.
“With inflation continuing to reduce, it seems the RBA’s rate hikes are having the desired effect.
“The question is now not if the RBA will cut rates – but when?”
Anthony Waldron from Mortgage Choice said recent data shows the economy is slowing, inflation is easing and households are cutting back on spending.
“The cumulative effect of these factors will likely give the RBA reason to keep the cash rate steady,” Waldron said.
Matthew Peter from QIC said despite reduced inflation, a sluggish economy means rate hikes are now off the table.
“Elevated migration, coming tax cuts and ongoing wage increases will stop the RBA from easing back on monetary policy until later this year,” Peter said.
Rate cuts not on the cards until 2025
Almost three-quarters of the panel (71%, 24/34) believe the recent inflation numbers are not enough to bring forward cash rate cuts.
Of the panellists who weighed in*, 1 in 4 (25%, 7/28) believe the RBA won’t start cutting rates until 2025.
Panellists are evenly split on whether the RBA will make the first cut before September (43%, 12/28) or afterwards (43%, 12/28).
For homeowners hoping for a rate decrease to ease their mortgage, 1 in 10 (11%, 3/28) are predicting a cut in May.
