Invest
Will the RBA cut rates this week?
Experts are forecasting that the Reserve Bank will take a dramatic measure and fire its last bullet, cutting rates out of cycle this week before starting quantitative easing.
Will the RBA cut rates this week?
Experts are forecasting that the Reserve Bank will take a dramatic measure and fire its last bullet, cutting rates out of cycle this week before starting quantitative easing.
According to Finder’s RBA Cash Rate survey, 53 per cent of experts and economists are predicting further easing this week.
Noel Whittaker, QUT, said, “Everybody else is [cutting; the RBA] don’t have much option,” as he predicted a rate reduction will happen later this week.
While Mark Crosby of Monash University believes businesses need further support despite the government recently announcing a $17 billion dollar stimulus package.
“Businesses cannot function without a workforce while still paying rent and interest. The RBA and government need to do what it takes to get these costs closer to zero,” Mr Crosby said.
Recession likely but will be short-lived
Not only are economists tipping the RBA to make drastic changes, they are also expecting Australia’s 28 years without a recession to be over, with 87 per cent saying a short-term recession is likely.
Graham Cooke, insights manager at Finder, said COVID-19 has unexpectedly put pressure on an already weakening Australian economy.
“We’ve seen fear of recession among the Australian public grow over recent months, while the vast majority of economists were saying it wouldn’t happen,” Mr Cooke said.
The impacts of the recession are predicted to hit the stock markets, with experts also asked how low the ASX could plunge before a recovery, with the average economist pointing to a bottom of 4,460.
“If markets plunge to the depths predicted here, it will be a 37 per cent drop since the market peak of 20 February. This will be the most significant drop since the 53 per cent plunge post-GFC,” Mr Cooke said.
Economists were divided as to whether the government’s stimulus package would be sufficient, with over half saying it was not.
Finally, most experts expected house prices to be negatively affected, with 20 per cent expecting a significant drop and 60 per cent expecting a slight drop.
Mr Cooke said this downturn in the market could present a window for cashed-up Aussies ready to buy.
“If you’re one of the first-time buyers who missed out on the 2019 price dip, 2020 could provide a second bite at the apple.
“Keep a close eye on your local market, but be careful – nobody knows what may be around the corner or how long this coronavirus dampening could really last,” Mr Cooke concluded.
RELATED ARTICLES
About the author
About the author
Economy
Australian and Korean leaders meet to unlock billions in new trade opportunities
In a significant effort to bolster economic ties and explore new avenues for investment, Australian and Korean leaders, alongside business executives and government officials, are gathering in Seoul ...Read more
Economy
Australia’s growth beat is real — but it’s the wrong kind for capacity
Australia’s economy outpaced forecasts in the June quarter as households opened wallets and government spending did the heavy lifting, even as public investment sagged. The signal for boardrooms: ...Read more
Economy
Australia’s growth is back—but it’s the wrong kind of strong
GDP surprised on the upside in the June quarter, powered by households and government outlays even as public investment slumped. The Reserve Bank stayed hawkish, signalling that sticky services ...Read more
Economy
Australia's Economic Resilience: Strong GDP growth challenges RBA's policy stance
In a surprising turn of events, Australia's economy has shown greater resilience than anticipated, with the latest Q2 GDP report revealing a stronger performance largely driven by vigorous household ...Read more
Economy
Economist calls for July RBA rate cut following inflation data
An economist from State Street Global Advisors has called for the Reserve Bank of Australia to cut interest rates in July following today's Consumer Price Index data for June. Read more
Economy
GDP data prompts economist to predict faster RBA rate cuts
Australia's latest GDP growth data has come in significantly below expectations, prompting an economist to suggest the Reserve Bank may need to ease monetary policy more aggressively. Read more
Economy
Global markets face turbulent start amid tariff concerns, but outlook remains cautious
Global equity and bond markets have experienced a turbulent start to 2025, primarily due to concerns that a potential tariff-driven trade war could heighten inflation and recession risks. Read more
Economy
RBA may cut rates faster if GDP data disappoints, economists say
The Reserve Bank of Australia may cut interest rates more quickly if next week's GDP data disappoints, economists said following today's consumer price index data for May. Read more
Economy
Australian and Korean leaders meet to unlock billions in new trade opportunities
In a significant effort to bolster economic ties and explore new avenues for investment, Australian and Korean leaders, alongside business executives and government officials, are gathering in Seoul ...Read more
Economy
Australia’s growth beat is real — but it’s the wrong kind for capacity
Australia’s economy outpaced forecasts in the June quarter as households opened wallets and government spending did the heavy lifting, even as public investment sagged. The signal for boardrooms: ...Read more
Economy
Australia’s growth is back—but it’s the wrong kind of strong
GDP surprised on the upside in the June quarter, powered by households and government outlays even as public investment slumped. The Reserve Bank stayed hawkish, signalling that sticky services ...Read more
Economy
Australia's Economic Resilience: Strong GDP growth challenges RBA's policy stance
In a surprising turn of events, Australia's economy has shown greater resilience than anticipated, with the latest Q2 GDP report revealing a stronger performance largely driven by vigorous household ...Read more
Economy
Economist calls for July RBA rate cut following inflation data
An economist from State Street Global Advisors has called for the Reserve Bank of Australia to cut interest rates in July following today's Consumer Price Index data for June. Read more
Economy
GDP data prompts economist to predict faster RBA rate cuts
Australia's latest GDP growth data has come in significantly below expectations, prompting an economist to suggest the Reserve Bank may need to ease monetary policy more aggressively. Read more
Economy
Global markets face turbulent start amid tariff concerns, but outlook remains cautious
Global equity and bond markets have experienced a turbulent start to 2025, primarily due to concerns that a potential tariff-driven trade war could heighten inflation and recession risks. Read more
Economy
RBA may cut rates faster if GDP data disappoints, economists say
The Reserve Bank of Australia may cut interest rates more quickly if next week's GDP data disappoints, economists said following today's consumer price index data for May. Read more
