Cash rate to hold in September
Higher inflation and resilient GDP has confirmed little chance of a September cash rate cut.
“After the August RBA cash rate cut, we’re not expecting a back-to-back cut in September -
especially after a higher read for inflation in the latest monthly indicator for July,” Mr Robertson said.
All eyes will now be on the quarterly inflation data - released late next month - to see just how long
homeowners will need to wait until they can breathe another sigh of relief.
“The Reserve Bank wouldn’t have been surprised by the rise in CPI in the monthly numbers due to
electricity rebates and other one-off factors, but core inflation was a little higher so the RBA will want
to see the full third quarter data out on October 29 before cutting again,” Mr Robertson said.
“Our next RBA rate cut is still forecast in November, but we are getting closer to the low in the
easing cycle, so jobs data and export demand will be important in this timing, and whether the RBA
need to keep cutting rates next year.”
US central bank rate cut imminent, while pace eases elsewhere
“The pace of central bank cuts elsewhere has eased as rates get closer to ‘neutral’,” Mr Robertson
said.
“However the US Federal Reserve is now expected to cut rates later this month after weaker jobs
data and after Federal Chair Jerome Powell gave his clearest message yet that a cut is imminent,
despite inflation trending higher.”
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