RBA unlikely to cut rates: AMP Capital

RBA unlikely to cut rates: AMP Capital

The Reserve Bank of Australia is unlikely to cut the interest rate at Tuesday’s meeting despite recent low inflation readings, according to AMP Capital.


Inflation experienced a “slump” in the September quarter, said AMP Capital chief economist Shane Oliver, however the inflation outcome remained in-line with the Bank’s expectations, making a cut in February unlikely.

Additionally, Mr Oliver said the RBA will likely “want to monitor the recent uptick in lending to property investors and see how the economy performs”.

“As a result all eyes will be on the post-meeting statement and the Statement on Monetary Policy to be released Friday,” he said.

The RBA is expected to cut its growth forecasts given the contraction in the market seen in the September quarter, Mr Oliver said, with the return of inflation to its target possibly being pushed out as well.

“Our assessment remains that - with record low wages growth, ongoing spare capacity, an increasing risk that low inflation will feed on itself and the Australian dollar remaining too high - the RBA will cut rates again around May,” he said.

Read more:

AMP alters approach to authorised representatives

Fixed income remains expensive: Morningstar

Australia’s competitiveness being ‘eroded’

Investors poised to reduce cash holdings

Data undermines case for industry fund changes

 

Related Articles

 

RBA unlikely to cut rates: AMP Capital
investordaily image
ID logo
promoted stories

Appointments

Tony Sacre

Sydney Stock Exchange CEO heads to Bentleys

Reporter

David Cumming

Aviva Investors poaches Standard Life execs

Reporter

Dan Annan

BetaShares hires institutional business director

Reporter

Analysis

investordaily image

CBA’s tactical retreat from wealth

Tim Stewart

Edmund Goh

Onshore China bonds – why own them?  

Edmund Goh

investordaily image

The SDGs: an ethical compass for investors

Carly Hammond