The Reserve Bank has cut its official interest rate from 1.5% to a historic low of 1.25%. This was a widely expected result and is the first change in the RBA’s policy setting since August 2016. The RBA governor Philip Lowe suggested an upcoming rate cut in last month’s speech.
All 43 economists surveyed by Refinitiv had pencilled in a rate cut this month, while 80% of them also expect a follow-up move in August. The futures market are also suggesting another cut is expected by this October.
The RBA has been under increasing pressure to stimulate a faltering domestic economy, with retail sales figures showing consumers have cut back their spending. Governor Philip Lowe said this month’s move would help reduce unemployment and boost inflation back towards its 2-3% target range.
The RBA have been loathe to cut rates in previous months for fear of further increasing risky household debt, the bank now felt it had to move given inflation has been under its 2-to-3% target band for the best part of 3 years and unemployment is starting rise.
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By Wendy Chamberlain
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With a passion for all things real estate spanning over 20 years, Wendy loves that her role as a Buyers Agent and Sellers Advocate gives her buying and selling clients an experienced voice they can trust when it comes to negotiating to buy or sell something as important as their home or investment. Wendy considers it a privilege to be asked to help others realise such an important goal as home ownership and to be trusted with that honour. Get in touch today via www.chamberlainadvocates.com.au for a no obligation chat about how Wendy can work with you and help you save time and money to secure your new home sooner.
