BANKS AND BANKING

Inflation is going north, wages south

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Original article by Matthew Cranston
The Australian – Page: 1 & 4 : 5-Nov-25

Reserve Bank of Australia governor Michele Bullock has indicated that the current monetary policy easing cycle could potentially be over, after the central bank left the cash rate unchanged at 3.6 per cent yesterday. The RBA has reduced official interest rates three times in 2025, but financial markets expect the next rate cut to occur in December 2026. Meanwhile, the RBA expects both headline and underlying inflation to remain above its target range of 2-3 per cent for at least another six months. Shadow treasurer Ted O’Brien has blamed Labor for the RBA’s decision to leave the cash rate on hold, contending that government spending is growing more than four times faster than the Australian economy.

CORPORATES
RESERVE BANK OF AUSTRALIA

‘Not confident’: RBA pours cold water on Labor’s housing dream

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Original article by Matthew Cranston
The Australian – Page: 1 & 4 : 1-Oct-25

The Reserve Bank of Australia had been widely tipped to leave the cash rate unchanged at its monetary policy board meeting yesterday. Financial markets have priced in a 40 per cent chance of a rate cut at the next meeting in November, but RBA governor Michele Bullock says progress on returning core inflation to its mid-point target of 2.5 per cent will determine the next move on interest rates. Quarterly inflation data to be released ahead of the next board meeting is likely to be crucial. Meanwhile, Bullock has warned that federal government action to boost supply is unlikely to address the housing market’s structural deficit in the next two years.

CORPORATES
RESERVE BANK OF AUSTRALIA

ASX stocks to fire as Fed kicks off cuts

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Original article by Gus McCubbing
The Australian Financial Review – Page: 27 : 17-Sep-25

Bond traders have fully priced in a 25 basis point interest rate cut at the US Federal Reserve’s monetary policy meeting this week. They are expect at least another four rate cuts over the next year, although David Bassanese from BetaShares and Sebastian Mullins from Schroders contend that the central bank will be less aggressive in reducing monetary policy. Meanwhile, Australian stocks are widely tipped to rally if the Federal Reserve does reduce the cast rate; Jun Bei Liu from Ten Cap says James Hardie Industries stands to benefit the most, given its exposure to the US housing market.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, BETASHARES CAPITAL LIMITED, SCHRODER INVESTMENT MANAGEMENT AUSTRALIA LIMITED, JAMES HARDIE INDUSTRIES PLC – ASX JHX, TEN CAP INVESTMENT MANAGEMENT PTY LTD

RBA’s grim growth warning

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Original article by Michael Read
The Australian Financial Review – Page: 1 & 4 : 13-Aug-25

The Reserve Bank of Australia has downgraded its forecast for productivity growth in the medium-term from one per cent to just 0.7 per cent. RBA governor Michele Bullock says lower productivity growth is already resulting in slower growth in real wages; she adds that the central bank cannot do anything to lift productivity, and the outlook for this metric will depend on what the federal government does in response to its economic reform summit next week. The RBA has also warned that the domestic economy can now sustain a GDP growth rate of just two per cent a year. Meanwhile, economists expect another official interest rate cut by the end of 2025, after the RBA reduced it by 25 basis points to 3.6 per cent on Tuesday.

CORPORATES
RESERVE BANK OF AUSTRALIA

Lower interest rates a welcome relief, critical banks pass on full cut

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Original article by
Australian Retailers Association – Page: Online : 13-Aug-25

Retailers have welcomed the Reserve Bank of Australia’s announcement of a 25-basis-point interest rate cut as a vital confidence boost for the sector’ recovery. The Australian Retailers Association and the National Retail Association said that lower interest rates will encourage much-needed discretionary spending. The ARA’s CEO Chris Rodwell says the two clear messages that stem from the decision are that the RBA remain open to further cuts in 2025 – given that retail growth and consumer confidence remain subdued – and it is critical that banks act now to pass on the full rate cut. Rodwell adds that a stronger Australian economic trajectory cannot happen without a retail recovery.

CORPORATES
AUSTRALIAN RETAILERS ASSOCIATION, NATIONAL RETAIL ASSOCIATION LIMITED, RESERVE BANK OF AUSTRALIA

Jobs, inflation swayed RBA on shock rates call

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 2 : 23-Jul-25

The minutes of the Reserve Bank of Australia’s monetary policy board meeting for July shows that it expects a further decline in underlying inflation by the end of 2025, which will justify more interest rate cuts. The board noted that the focus of the July meeting was on the timing and extent of further monetary policy easing. The minutes also show that factors such as the monthly inflation data and the resilience of the labour market contributed to the board’s decision to leave the cash rate unchanged in July, despite widespread expectations of a 25 basis point cut.

CORPORATES
RESERVE BANK OF AUSTRALIA

Treasurer’s calling but RBA puts him on hold

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Original article by Greg Brown, Matthew Cranston
The Australian – Page: 1 & 6 : 9-Jul-25

Treasurer Jim Chalmers says the Reserve Bank’s decision to leave the cash rate on hold is not the outcome that millions of Australians were hoping for and financial market had expect. Most economists had expected a rate cut on Tuesday, and financial markets had priced in a near-100 per cent chance. However, RBA governor Michele Bullock contends that traders were too focused on the monthly inflation data for June, which showed a headline rate of 2.1 per cent; she says the monthly figures are volatile and the RBA board is not yet convinced that inflation is that low in a "sustainable way". The RBA will instead wait for inflation data for the June quarter to be released at the end of this month. Six members of the monetary policy board voted to leave the cash rate at 3.85 per cent, while three favoured a rate cut.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

Rate hold may take wind out of home sales

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Original article by Lucy Slade
The Australian Financial Review – Page: 25 : 9-Jul-25

AMP’s chief economist Shane Oliver says the Reserve Bank’s decision to leave the cash rate unchanged on Tuesday is likely to "dampen down" enthusiasm among prospective home buyers. He adds that while the decision will not led to a dramatic shift in sentiment, buyers are likely to be a bit more cautious. Oliver had thought there was an 80 per cent chance of a rate cut in July, but he expects the next cut to occur in August. Eliza Owen from Cotality believes that a rate cut next month is almost certain.

CORPORATES
AMP LIMITED – ASX AMP, RESERVE BANK OF AUSTRALIA, COTALITY

RBA flags spectre of recession

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Original article by Matthew Cranston, Jack Quail
The Australian – Page: 1 & 7 : 21-May-25

The Reserve Bank of Australia considered reducing the cash rate by 50 basis points on Tuesday, rather than its second 25 basis point cut so far in 2025. The central bank noted in its monetary policy statement that inflation is within its target band and is expected to remain there, so it deemed that an interest rate cut was appropriate. However, the RBA cautioned that although upside risks appear to have diminished, international developments are likely to weigh on the domestic economy. The RBA has downgraded its GDP growth forecast for the year to June from two per cent to 1.8 per cent, while it has warned of an outside chance that the Trump administration’s trade war could result in a global recession.

CORPORATES
RESERVE BANK OF AUSTRALIA

‘Locked in’: Westpac’s big interest rate cut call

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Original article by Cameron Micallef
The Australian – Page: 23 : 29-Apr-25

Westpac’s chief economist Luci Ellis believes that the Reserve Bank of Australia is certain to reduce the cash rate by 25 basis points in May. She says a rate cut is likely even if inflation data for the March quarter is slightly disappointing. Ellis does not expect the RBA to reduce the cash rate by 50 basis points in May, although she says there is the potential for a cut of 35 basis points, which would reduce the cash rate to 3.75 per cent. Ellis also expects rate cuts in both August and November.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, RESERVE BANK OF AUSTRALIA