MONETARY POLICY – AUSTRALIA

Rate cuts still on the way after tariff pause

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Original article by Cecile Lefort
The Australian Financial Review – Page: 29 : 14-May-25

IFM Investors’ chief economist Alex Joiner has described the 90-day tariff pause agreed to by the US and China as a "small step forward". However, he cautions that the significant tariffs that remain in place during the temporary truce in the trade war will still be a major challenge for US households, businesses and the broader economy. Meanwhile, financial markets expect the US Federal Reserve to reduce official interest rates by 25 basis points in September; the Reserve Bank of Australia is in turn tipped to cut the cash rate three times before the end of 2025, by 85 basis points in total.

CORPORATES
IFM INVESTORS PTY LTD, UMOW LAI & ASSOCIATES PTY LTD, 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

Just four economists expect the RBA to stay pat on rates

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Original article by Cecile Lefort
The Australian Financial Review – Page: 23 : 16-Apr-25

Financial markets have fully priced in a 25 basis point interest rate cut at the Reserve Bank of Australia’s monetary policy meeting in May, and a 34 per cent chance of a 50 basis point cut. The general consensus of economists is also that the cash rate will be eased in May; most economists had previously expected rates to remain unchanged in May, prior to the global financial market turmoil in response to the Trump administration’s tariffs war.

CORPORATES
RESERVE BANK OF AUSTRALIA, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Job losses not RBA’s priority as bank keeps rates on hold

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Original article by Shane Wright, Millie Muroi
The Age – Page: Online : 2-Apr-25

Reserve Bank of Ausralia governor Michele Bullock says that keeping inflation under control will be its top priority, after the central bank’s new monetary policy board left the cash rate unchanged on Tuesday. Bullock contends that there is no point in letting inflation rise because it would eventually result in higher unemployment. The RBA’s monetary policy statement noted that although underlying inflation is continuing to ease, the board needs to be confident that inflation will return to the middle of its target range of 2-3 per cent and stay there. Shadow treasurer Angus Taylor says the RBA’s interest rates decision affirms the fact that living standards have declined since Labor took office in 2022.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Traders temper rate bets after RBA holds

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Original article by Cecile Lefort
The Australian Financial Review – Page: 25 : 2-Apr-25

Bond market traders are now pricing in a 67 per cent chance tha the Reserve Bank of Australia will reduce the cash rate in May, after its widely anticipated decision to leave rates unchanged on Tuesday. Money markets had put the odds of a rate cut in May at 77 per cent prior to the RBA’s latest two-day monetary policy meeting. However, market participants have still fully priced an interest rate cut at the RBA’s next meeting in July. Christian Bayliss from Fortlake Asset Management says the quarterly CPI data to be released in late April will be crucial to the decision on interest rates in May.

CORPORATES
RESERVE BANK OF AUSTRALIA, FORTLAKE ASSET MANAGEMENT LIMITED

RBA not in mood to keep cutting

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Original article by Jack Quail
The Australian – Page: 4 : 5-Mar-25

The minutes from the Reserve Bank of Australia’s board meeting in February show that it considered leaving the cash rate unchanged at 4.35 per cent. The RBA board subsequently concluded that the case for an interest rate cut of 25 basis points was a "stronger one". However, the minutes emphasised that further interest cuts are by no means certain, a point that the RBA also made in a statement that was released after the two-day board meeting in mid-February. Money markets have now priced in two further interest rate cuts in 2025, beginning in July; the federal election must be held no later than 17 May.

CORPORATES
RESERVE BANK OF AUSTRALIA

The one-cut wonder

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Original article by Greg Brown, Jack Quail, Sarah Ison
The Australian – Page: 1 & 4 : 19-Feb-25

Prime Minister Anthony Albanese says the first official interest rate cut in more than four years will have no impact on the timing of the federal election, and that the budget is still set for 25 March. However, the Reserve Bank of Australia’s 25 basis point interest rate cut on Tuesday has provided Albanese with a trigger for an early election. RBA governor ­Michele Bullock has downplayed expectations of further interest rate relief, contending that the central bank’s board will need more evidence that inflation is falling to the middle of its 2-3 per cent target range. The RBA’s preferred measure of underlying inflation fell to 3.2 per cent in the year to December, and the central bank now expects it to fall to 2.7 per cent in June. The election must be held no later than 17 May.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, RESERVE BANK OF AUSTRALIA

ALP’s Michele bollocking: cut rates now

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Original article by Greg Brown, Jack Quail
The Australian – Page: 1 & 4 : 18-Feb-25

Labor MP Mike Freelander says the Reserve Bank of Australia should reduce the cash rate by 50 basis points at its board meeting today. He is among a number of Labor backbenchers who have urged the RBA to ease monetary policy, even though Treasurer Jim Chalmers has told government MPs to avoid publicly commenting on the issue. Opposition leader Peter Dutton favours a rate cut, arguing that families need interest rates relief after 12 increases under the current government. However, EQ Economics’ chief economist Warren Hogan says the case for a rate cut is pretty weak at present, and the RBA should leave the cash rate on hold.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, EQ ECONOMICS PTY LTD

Dutton to RBA: resist pressure to cut rates

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Original article by Michael Read, John Kehoe
The Australian Financial Review – Page: 4 : 12-Feb-25

Bond market traders have priced in a 95 per cent chance that the Reserve Bank of Australia will reduce the cash rate next week. The case for a rate cut was strengthened by recent data showing that the RBA’s preferred measure of underlying inflation has fallen to 3.2 per cent. However, Opposition leader Peter Dutton says there is concern that the RBA may need to tighten monetary policy again if it reduces the cash rate too soon. He has urged RBA governor Michele Bullock to act in the nation’s best interests rather than yielding to political pressure to cut interest rates.

CORPORATES
RESERVE BANK OF AUSTRALIA, LIBERAL PARTY OF AUSTRALIA

Inflation fall fuels election fight

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Original article by Greg Brown, David Rogers
The Australian – Page: 1 & 4 : 30-Jan-25

Treasurer Jim Chalmers says a ‘soft landing’ for the Australian economy is becoming "more and more likely" following the release of CPI data for the December quarter. The headline inflation rate fell 0.4 per cent to 2.4 per cent in the year to December; the Reserve Bank’s preferred measure of underlying inflation eased to 3.2 per cent, below the central bank’s own expectations of 3.4 per cent. Three of Australia’s four major banks now expect an official interest cut in February. However, Warren Hogan from Judo Bank says the economic case for a rate cut is very weak; he notes amongst other things that core inflation remain above the RBA’s target range of 2-3 per cent, while the cost-of-living crisis is still a major issue for many Australians.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA, JUDO BANK PTY LTD