Market pricing of cash rate cuts by the Reserve Bank of Australia (RBA) has extended over the past week (refer to chart below). A further 25 cumulative basis points of cuts are currently priced by the May Reserve Bank Board meeting, and then a further 20 basis points beyond that by the end of the year.
It would be very unusual for the Reserve Bank not to follow up the February rate cut with another one in March. If history is any indication, another rate cut in March should be expected and yet the market is still only assigning a 50% probability.
Past cycles highlight that the RBA usually follows up easings quickly (refer to chart below)
Disclaimer: Whilst all care has been taken in compiling the information, the information should not be relied upon as substitute for professional advice where necessary. Rural Bank Limited accepts no responsibility for the accuracy, completeness or timeliness of the information and disclaims all liability in relation to any loss or damage suffered by the use of or reliance upon any information contained herein or in any attachment or annexure hereto by any person. Rural Bank - A Division of Bendigo and Adelaid Bank ABN 11 068 049 178 AFSL/Australian Credit Licence 237879.