Reserve Bank of Australia expected to cut its cash rate by 25bp on February 18

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Reserve Bank of Australia expected to cut its cash rate by 25bp on February 18

The Reserve Bank of Australia meet on February 17 and 18. The Statement is expected at 2.30pm local time on the 18th:

Reserve Bank of Australia Governor Bullock will hold her press conference an hour later.

Via Reuters poll:

• Reuters poll indicates the Reserve Bank of Australia (RBA) will cut the cash rate to 4.10% on February 18, with 40 of 43 economists predicting a 25 basis point (bps) reduction.

• Median forecasts project an additional 75 bps of cuts this year, lowering the rate to 3.60% by end-2025.

• Easing inflation, which fell to 2.4% (within the RBA's target), and slowing economic growth support the decision to cut rates.

• Despite moderating inflation, a strong labour market and wage growth reduce the urgency for aggressive cuts.

• Major banks (ANZ, CBA, NAB, Westpac) expect a 25 bps cut on February 18 and between 50-100 bps in total cuts for 2025.

• Over 75% of economists foresee another 25 bps cut in Q2, bringing rates to 3.85%.

• The cash rate is projected to reach 3.60% by September, followed by a pause through early 2026.

Unlike other developed economies, apart from Japan of course, the RBA has held rates steady. The first cut is expected next week. I don't think the RBA would be brave enough to not cut in the face of such overwhelming expectations.

                This article was written by Eamonn Sheridan at www.forexlive.com.

Source: Reserve Bank of Australia expected to cut its cash rate by 25bp on February 18

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