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Cash rate hold expected, rate cuts pushed further out

by Adrian Suljanovic11 minute read

The chance for an interest rate cut in 2024 continues to dwindle as the RBA is expected to hold rates at 4.35 per cent in June.

Markets and economists alike have agreed on another cash rate hold to occur during the Reserve Bank of Australia’s (RBA) June monetary policy meeting at 4.35 per cent.

As of 12 June, the ASX’s RBA Rate Tracker has market expectations of a cash rate hold at 95 per cent, while 5 per cent are anticipating a 0.25-bp decrease, which would bring the cash rate down to 4.1 per cent.

However, economists such as Bendigo Bank’s chief economist David Robertson have doubled down on no rate cuts until 2025.


Although the latest GDP data hinted at a slowing economy, the impact of impending tax cuts, and the recent consumer price index (CPI) data, Robertson stated that households should not “budget for a rate cut in 2024.”

“For the RBA to cut rates, they will need to be convinced high inflation is fully contained; and the latest monthly CPI figures unfortunately don’t help that perception,” Robertson said in his June Economic Update.

“With both headline CPI and core inflation rising marginally in the April data, this uptick, together with the uncertainty of the impact of state and federal budgets, adds to a ‘rates on hold’ outlook.

“Similarly, uncertainty around how much of the tax cuts will be ‘saved versus spent’ doesn’t appear consistent with further RBA hikes, so our long-held view the RBA will start cutting rates early next year remains unchanged.”

Additionally, economists from Judo Bank, Warren Hogan and Matthew De Pasquale, said we may still “need a miracle” to avoid further rate hikes.

“There is a good chance that we get through this next 12 months with a 4.35 per cent cash rate, but it’s not the central (most likely) pathway,” they said.

“Some good news on labour costs suggests that the risk of rate hikes might have declined a little, but we are not out of the woods.

“The next monthly CPI and then the quarterly CPI numbers are critical. We continue to expect a 25-bps rate hike in August.”

Furthermore, economist from Moody’s Analytics, Harry Murphy Cruise, stated that the outlook for Aussie inflation “has gotten a little murkier as of late”.

“With inflation digging in its heels, the government is ramping up spending to bring it down faster,” Cruise said.

“The government (and RBA) hopes the rebates will lower inflation, first by temporarily lowering the price in the CPI, and secondly by tempering inflation expectations.

“The board will be cautious not to pull the rate-cut trigger too early, what with large amounts about to hit bank accounts. We see rates staying where they are until December, when a 25-basis point cut will take the cash rate to 4.1 per cent.”

[RELATED: No ‘quick fix’ to housing woes: RBA]

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Adrian Suljanovic


Adrian Suljanovic is a journalist on Momentum Media's mortgages titles: The Adviser and Mortgage Business.

Adrian has written for a range of titles under the Momentum Media umbrella such as IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: [email protected]


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