The Reserve Bank of Australia next meet on May 19- 20
In summary from Australian ‘big four’ bank Westpac, bolding is mine:
- Lock it in, no need to wait for the CPI: RBA Monetary Policy Board expected to cut by 25bps at its 20 May meeting.
- For the past several quarters, the near-term outlook for RBA policy has been data-driven. This makes it tricky to predict what the Monetary Policy Board will decide beyond the upcoming meeting. You cannot be sure until you have seen the latest data. For example, had the Q4 2024 trimmed mean inflation not surprised on the downside, the Board would probably have remained on hold at the February 2025 meeting.
- The turmoil abroad has, however, changed the game and flipped the risks.
- You can lock in a 25bp cut in May, even if the Q1 inflation data are a shade disappointing.
- We still expect two further cuts this year after the one in May, but the risks on timing and extent have shifted to the downside, from the upside where they previously had been.
The cut will take the RBA cash rate to 3.85%
This article was written by Eamonn Sheridan at www.forexlive.com.