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<p><a href="https://bitcoinworld.co.in" rel="noopener noreferrer nofollow">BitcoinWorld</a><br><img src="https://bitcoinworld.co.in/wp-content/uploads/rba-next-move-rate-cut-consensus.jpg"><br><a href="https://bitcoinworld.co.in/rba-next-move-rate-cut-consensus/" rel="noopener noreferrer nofollow">Market Consensus Builds: RBA’s Next Move Seen as Rate Cut, Not Hike</a></p>
<p>A growing consensus among economists, money markets, and industry analysts points firmly toward the Reserve Bank of Australia (RBA) delivering an interest-rate cut at its next policy meeting, rather than a hike. This marks a significant shift from the hawkish sentiment that dominated much of 2024, as domestic inflation data softens and global monetary conditions begin to ease.</p>
<h2 id="why-the-outlook-has-shifted">Why the outlook has shifted</h2>
<p>The RBA’s own quarterly forecasts, combined with weaker-than-expected consumer price index (CPI) readings in recent months, have reduced the urgency for further tightening. Australia’s trimmed mean inflation — the RBA’s preferred measure — has fallen from its 2022 peak of around 6.8% to just above the central bank’s 2–3% target band. This disinflation trend, coupled with a softening labour market, has led most major bank economists to revise their rate call from “hold” to “cut” within the next two quarters.</p>
<p>Money markets are now pricing in a 70% probability of a 25-basis-point reduction at the RBA’s next meeting, according to data from the ASX 30-Day Interbank Cash Rate Futures. This is a stark reversal from just three months ago, when markets were pricing in a 40% chance of a hike.</p>
<h2 id="what-the-data-tells-us">What the data tells us</h2>
<p>Several key indicators underpin the dovish pivot:</p>
<ul>
 <li><strong>Inflation:</strong> Monthly CPI indicator fell to 3.4% in January 2025, down from 4.1% in December 2024, driven by lower goods inflation and moderating services costs.</li>
 <li><strong>Labour market:</strong> The unemployment rate ticked up to 4.2% in February, with underemployment rising — a sign that the labour market is no longer overheating.</li>
 <li><strong>Consumer spending:</strong> Retail sales volumes contracted for the third consecutive quarter, reflecting a cautious household sector under mortgage stress.</li>
 <li><strong>Global context:</strong> The U.S. Federal Reserve and European Central Bank have both signalled rate cuts in mid-2025, reducing pressure on the RBA to maintain high rates to defend the Australian dollar.</li>
</ul>
<h2 id="expert-views-and-institutional-alignment">Expert views and institutional alignment</h2>
<p>All four of Australia’s major retail banks — Commonwealth Bank, Westpac, NAB, and ANZ — now forecast a rate cut in the second quarter of 2025. Commonwealth Bank’s head of Australian economics, Gareth Aird, stated in a recent note: “The data flow has shifted decisively. We see the RBA moving to an easing stance in May, with a total of 75 basis points of cuts by year-end.”</p>
<p>Independent economists, including those at the Australian National University’s Centre for Applied Macroeconomic Analysis, broadly agree, though they caution that a resilient services inflation reading could delay the first cut until August.</p>
<h3 id="what-this-means-for-borrowers-and-households">What this means for borrowers and households</h3>
<p>For the millions of Australian mortgage holders who have endured 13 rate rises since May 2022, a cut would provide meaningful relief. A 25-basis-point reduction on a $600,000 variable-rate loan would lower monthly repayments by approximately $95. However, economists warn that a single cut will not fully offset the cumulative impact of previous hikes, and that the RBA is likely to ease gradually.</p>
<h2 id="conclusion">Conclusion</h2>
<p>The RBA’s next move is increasingly expected to be a cut, supported by easing inflation, a cooling labour market, and global monetary trends. While risks remain — particularly around services inflation and wage growth — the weight of evidence has shifted decisively. Borrowers and investors should prepare for a lower cash rate environment in the months ahead, though the pace and depth of easing will depend on incoming data.</p>
<h2 id="faqs">FAQs</h2>
<p><strong>Q1: When is the RBA’s next interest rate decision?</strong><br>The RBA’s next monetary policy meeting is scheduled for May 6–7, 2025, with the decision announced on May 7 at 2:30 PM AEST.</p>
<p><strong>Q2: How much could rates be cut?</strong><br>Most economists forecast a 25-basis-point cut initially, with further reductions possible later in 2025 if inflation remains contained. The cash rate currently stands at 4.35%.</p>
<p><strong>Q3: Will a rate cut affect the Australian dollar?</strong><br>A rate cut typically puts downward pressure on the Australian dollar as it narrows the yield advantage over other currencies. However, the impact may be muted if global central banks also ease simultaneously.</p>
<p>This post <a href="https://bitcoinworld.co.in/rba-next-move-rate-cut-consensus/" rel="noopener noreferrer nofollow">Market Consensus Builds: RBA’s Next Move Seen as Rate Cut, Not Hike</a> first appeared on <a href="https://bitcoinworld.co.in" rel="noopener noreferrer nofollow">BitcoinWorld</a>.</p>

Market Consensus Builds: RBA’s Next Move Seen as Rate Cut, Not Hike

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