December 9th 2024.
The Reserve Bank of Australia is expected to maintain their current interest rates when they announce their decision this afternoon. As of November 8 last year, the cash rate has remained at 4.35 percent. Many financial experts believe there will not be a decrease until next year.
In a recent survey conducted by Finder, all 40 experts consulted predicted that rates would stay steady in December. However, there may be some relief on the horizon. Graham Cooke, head of consumer research at Finder, stated that the rising cost of living has put a significant strain on households, particularly young Australians who are renting, paying off a mortgage, or raising children.
Cooke added that there is good news for Australians as a rate cut could potentially occur within this financial year. According to the experts on Finder's panel, the first cut is likely to happen within the first three meetings of next year. The majority of experts, close to 50 percent, believe that the cut will happen in May, while around a quarter anticipate it in February.
One expert from ANZ, Adelaide Timbrell, believes that the first rate cut will occur in May, citing the resilience of the economy, job growth, and business conditions. However, she also mentioned that their view on the amount of rate cuts has shifted, and they now expect only two – in May and August 2025. This would leave the terminal cash rate at 3.85 percent.
Similarly, Shane Oliver from AMP also predicts a rate cut in May. He added that with inflation on a downward trend and weaker growth than expected, the Reserve Bank of Australia should consider cutting rates earlier, and there is a high possibility of a cut in February.
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