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.
About the author
About the author
Economy
Government flags US-style bankruptcy rules
Small businesses with less than $1 million in liabilities will be given the opportunity to restructure their affairs and continue to trade under proposed changes by the federal government. ...Read more
Economy
How can high-net-worth migrants help Australia’s economy?
The recommencement of Australia’s business innovation and investment visa program will “have a tremendous impact” on the economy’s ability to recover, according to a wealth management company....Read more
Economy
No place for PM’s ‘political pride’ in economic rebuild: Kevin Rudd
The former prime minister who steered Australia away from recession back in 2008 has weighed in on the “basic things” he believes the current government needs to do to improve national confidence ...Read more
Economy
PM backs gas-powered economic recovery
Prime Minister Scott Morrison has outlined his vision for a gas-led economic recovery from the coronavirus pandemic, declaring the cheap and reliable power will help boost the economy. ...Read more
Economy
JobSeeker cuts to cost 145,000 jobs
The Morrison government’s plans to reduce the coronavirus supplement for Australians on JobSeeker, Youth Allowance and Parenting Payment will see 145,000 jobs lost, costing $31.3 billion, according ...Read more
Economy
Victoria announces largest stimulus in state’s history
The Victorian government will spend $3 billion supporting small and medium-sized enterprises as businesses are tipped to reopen from the middle of this week. ...Read more
Economy
2 overlooked ways to kickstart Australia’s economy
Following the first recession in nearly three decades, Australia is missing two key opportunities to kickstart the economy, according to a study. ...Read more
Economy
Why a tsunami of insolvencies are coming January 2021
Emergency measures by the federal government could see a wave of business failures at the start of the new year as late payments become the new norm, new research has found. ...Read more
Economy
Government flags US-style bankruptcy rules
Small businesses with less than $1 million in liabilities will be given the opportunity to restructure their affairs and continue to trade under proposed changes by the federal government. ...Read more
Economy
How can high-net-worth migrants help Australia’s economy?
The recommencement of Australia’s business innovation and investment visa program will “have a tremendous impact” on the economy’s ability to recover, according to a wealth management company....Read more
Economy
No place for PM’s ‘political pride’ in economic rebuild: Kevin Rudd
The former prime minister who steered Australia away from recession back in 2008 has weighed in on the “basic things” he believes the current government needs to do to improve national confidence ...Read more
Economy
PM backs gas-powered economic recovery
Prime Minister Scott Morrison has outlined his vision for a gas-led economic recovery from the coronavirus pandemic, declaring the cheap and reliable power will help boost the economy. ...Read more
Economy
JobSeeker cuts to cost 145,000 jobs
The Morrison government’s plans to reduce the coronavirus supplement for Australians on JobSeeker, Youth Allowance and Parenting Payment will see 145,000 jobs lost, costing $31.3 billion, according ...Read more
Economy
Victoria announces largest stimulus in state’s history
The Victorian government will spend $3 billion supporting small and medium-sized enterprises as businesses are tipped to reopen from the middle of this week. ...Read more
Economy
2 overlooked ways to kickstart Australia’s economy
Following the first recession in nearly three decades, Australia is missing two key opportunities to kickstart the economy, according to a study. ...Read more
Economy
Why a tsunami of insolvencies are coming January 2021
Emergency measures by the federal government could see a wave of business failures at the start of the new year as late payments become the new norm, new research has found. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
