4 hours Ago By Cameron Micallef
ANZ has become the latest bank to say the Reserve Bank won’t cut rates until May 2025. The bank had previously expected rate relief for mortgage holders to come three months earlier, when the RBA first met on February 2025. The shift in forecast comes after a stronger than expected labour market and business conditions, and confirmation that consumers have “noticed” the Stage 3 tax cuts.
It’s consistent with financial markets pricing on the timing of the first rate cut. ANZ now joins National Australia Bank also expects rate cuts to start in May, while Commonwealth Bank and Westpac are holding with calls of rate cuts in February. ANZ head of Australian economics, Adam Boyton updated his call following, a key speech by RBA governor Michele Bullock which he called hawkish.
“At turning points, we should focus more on what the RBA should do rather than its rhetoric, but we had expected a more neutral tone by now,” Mr Boynton said. “With the board still focused on the level of demand exceeding supply, our forecast for six-month annualised trimmed mean inflation to fall just within the RBA’s target band by the February meeting is no longer looking like enough.” More to come.
