RBA board says no cuts expected in next six months after leaving interest rates on hold — as it happened

by Admin
August 5, 2024

That’s the view of EY chief economist Cherelle Murphy, who spoke to finance presenter Alicia Barry on News Channel a short time ago.

Asked whether the RBA will have capacity to cut interest rates by the end of the year — as money markets are currently pricing in — Ms Murphy said it’s unlikely there will be any cuts until 2025.

“At this stage, it looks like the economy is just continuing to boil along just that little bit too fast compared to where it can supply, and that means that the upward pressure on inflation, does remain in the economy, in our view,” she said.

“Until the Reserve Bank is really clear that that is not the case anymore, we think that it’s going to sit on rates where they are.

“Now, while they’re higher than they’ve been, they’re not overly high compared to many other countries, or compared to our recent past.

“So we have to remember that this is not exceptionally tight policy, albeit slowing the economy down a little bit.

“So our view is that they can afford to sit where they are for some time yet, and it’s probably going to be 2025, at this stage, from what we can see in the data before they will be actually cutting rates.”