Westpac revise its RBA forecast – see later but faster interest rate cuts

Westpac were forecasting a February 2025 rate cut but have pushed that out to May 2025.

In brief:

• We have revised our view of the most likely scenario for the path of the RBA’s cash rate, pushing out the start date of the rate-cutting cycle from February to May.
• Similar to the pattern in some peer economies, we expect the initial moves to be somewhat front-loaded, with consecutive cuts in late May and early July.
• This is also a change from our previous expectation of a moderate pace of decline of one cut per quarter.
• We continue to expect the terminal rate to be 3.35%, to be reached by year-end 2025.

Current RBA cash rate is 4.35%

This article was written by Eamonn Sheridan at www.forexlive.com.