news

Momentum builds for back-to-back rate cuts

By Staff Reporter

The property market might be about to get another shot in the arm, with a substantial number of economists forecasting a rate cut tomorrow.

According to a survey by comparison website finder.com.au, 16 of the 37 economists and commentators it consulted said the Reserve Bank of Australia would cut rates at tomorrow’s monthly meeting.

The other 21 forecast that the board would leave the cash rate at a record-low 2.25 per cent.

The Reserve Bank caused a surprise last month when it reduced the cash rate by 0.25 per cent, having left it at 2.5 per cent since August 2013.

Some economists think the Reserve Bank might further reduce rates to stimulate the economy and encourage a fall in the Australian dollar.

However, others believe the Reserve Bank will be reluctant to give more of a boost to the housing market and will want more time to assess the effect of last month’s rate cut.

ANZ chief economist Warren Hogan said the central bank historically makes back-to-back cuts when it begins a new interest rate cycle.

“They've signalled that the economic outlook is a little bit weaker than they have previously been expecting,” Mr Hogan said.

“They've factored in to their predictions further cuts to interest rates and so there's little reason to wait.”

St George Bank senior economist Janu Chan said the Reserve Bank would probably leave rates on hold this month.

“We think that the RBA will still want to give the economy more support, but it will prefer to wait at this meeting so it can assess developments, particularly the currency and housing markets,” she said.

ME Bank’s general manager of markets, John Caelli, said the Reserve Bank would definitely move in April if it doesn’t cut rates tomorrow.

“Rate cuts typically operate in cycles – you can expect more. What’s driving the falls is lower-than-forecasted growth and a desire to keep currency low,” he said.

Momentum builds for back-to-back rate cuts
SPI logo
Thank you.

Your enquiry has been sent to a local Aussie Mortgage Broker.

We will be in contact with you shortly.
Opps.

error occurred.
Unfortunately Aussie cannot attend to your home loan related enquiry at this stage as you must be a citizen or permanent resident.
Do you need help finding the right loan for your investment?
What Aussie do for you:
  • Give expert mortgage advice to help you find great investment loan deals
  • Help you maximise return by lowering financing costs
  • Save you time and effort by helping with the paperwork
First name
Last name
Location
Mobile Number
Are you an Australian Resident?
promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BLUE BAY 49.18%
2.
PAMBULA 43.5%
3.
BERKELEY VALE 42.74%
4.
POINT PIPER 40.52%
5.
NORTH TURRAMURRA 38.12%