November is still the expected date for the Reserve Bank of Australia to lower interest rates, according to ANZ’s Head of Australian Economics Adam Boyton. The bank held the rate at 4.35 per cent at its February meeting.
Recent consumer price index data had lifted market hopes of an early cut, but Boyton suggested the bank remains unmoved.
Speaking on the 5 in 5 with ANZ podcast, Boyton said ANZ Research was “still thinking November for the first interest rate cut from the Reserve Bank”.
“Nothing we got from the Reserve Bank [in its February decision] changes that,” he said. “If anything, I guess the caution that the bank [showed] on declaring victory against inflation early means they will ultimately be a little slower to start easing than what the market might’ve been looking for.”
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While there are encouraging signs, Boyton said, the RBA board remains focused on inflation.
“In the statement we got from the bank yesterday, they did say a further increase in interest rates cannot be ruled out,” he said. “That’s I guess the hawkish part.”
There was some dovish news though, Boyton said, “most notably in the forecast for inflation”.
“The forecasts were a little dovish, potentially,” he said. “The post-meeting statement and that tightening bias, a little hawkish.
“But overall, the supertanker that is the central bank is starting to shift.”
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