Consensus holds out for up to 3 more rate cuts in 2025: Finder

Finder’s latest RBA Cash Rate Survey, ahead of the Reserve Bank of Australia’s next monetary policy decision tomorrow, has found 94 per cent of economic experts polled are expecting a rate hold.

Of the 34 experts who participated in the survey, 32 said they believe the RBA will keep the official cash rate at 4.1 per cent, after it was cut by 25 basis points at the last board meeting on 18 February.

This month’s survey also found that anticipation for another rate cut has fallen since February, when 22 per cent of the economists polled felt at the time that the central bank would continue to lower the rate at consecutive meetings this year.

However, 63 per cent of the 30 expert respondents still expected two to three more rate cuts to come this year.

“The February cut signalled a turning point for many cash-strapped borrowers – they hoped a couple more would be coming thick and fast,” Graham Cooke, Head of Consumer Research at Finder, said.

“New inflation figures show headline inflation is within target range, so while we’re unlikely to see a second rate cut in April, we’re anticipating further relief from May onwards.”

Professor of Economics at Macquarie University, Jeffrey Sheen, was one of the two experts that believe the RBA is “marginally” more likely to reduce the official cash rate again than decide on a hold.

“The headline inflation rate seems settled within the target range. While core or underlying inflation measured by the trimmed rate is just above the range, more sophisticated statistical measures (e.g. from dynamic factor modelling) indicate that it is in the range,” he said.

“With the escalating global tariff war and the likely weakening of global economic activity, the RBA should act now in anticipation.

“The Board will be torn between the risk that inflation is not fully under control and the risk of a future downturn and recession.”

In a similar vein, while 94 per cent of the experts believed the RBA would keep the rate as is, only 79 per cent believed they should do so and 18 per cent said they should announce a rate cut.

When surveyed, Leanne Pilkington from Laing+Simmons said while she expects a rate hold will come out of tomorrow’s decision, a cut would be “shrewd” given recent data on the labour market.

“As well as sustained cost of living pressure and moderating inflation, the unexpected hit to employment figures has widened the window of opportunity for the RBA to cut rates, which it is expected to do in coming months anyway. It might be prudent to act now,” she said.