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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

Thanks to RBA Governor Lowe’s comments last week, we are now a lot closer to not “if” but “when” would the RBA cut rates.  In his speech last week, the RBA governor confirmed that the RBA will consider the case for a rate cut at their next board meeting. In his speech, Lowe was up-front saying: “a lower cash rate would support employment growth and bring forward the time when inflation is consistent with the target” and “at our meeting in two weeks’ time, we will consider the case for lower interest rates.” This is the most direct comment ever from the RBA Governor and the clearest signal yet that rates would be cut as early as June. It doesn’t guarantee that the RBA will deliver a rate cut, but it is as good as we are ever likely to get.

Financial markets are now convinced a 4th June rate cut is imminent (at a 98% probability) with a possible second RBA rate cut in August to help stabilise employment growth and increase the likelihood that CPI will rise back to the RBA’s target range.

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Source: Rural Bank


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 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 Adelaide Bank Limited ABN 11 068 049 178 AFSL 237879