Economists form majority over rate cuts to come: Finder

A poll of 41 financial experts and economists conducted by online comparison site, Finder, has signalled the market’s “overwhelming” agreeance that tomorrow’s Reserve Bank of Australia (RBA) monetary policy decision will result in a rate cut.

Approximately 88 per cent of the experts polled said they believe the RBA will move to reduce the official cash rate, after the latest Australian Bureau of Statistics (ABS) data found the trimmed mean inflation indicator had settled within the RBA’s target range of two to three per cent.

Of the 88 per cent expecting a cut, 94 per cent said it would come at 25 basis points and 6 per cent said a “supersized” 50-basis-point cut was likely.

Graham Cooke, Head of Consumer Research at Finder, said the experts also cited weak GDP growth, stalling consumer spending and global uncertainty in the wake of the Trump administration’s tariff announcements.

“With a February cut and now one expected in May, homeowners might finally start to feel tangible relief,” he said.

“Our experts are predicting several more cuts later this year, and we could be looking at a cash rate of close to 3% by Christmas.

“With any rate cut, if you can continue making the same payment each month, you will knock more off the principal and pay less interest over the long run.”

The poll also revealed that 75 per cent of the experts and economists expect two or more rate cuts over the next 12 months, with 56 per cent agreeing that there will be rate cuts in July and August, 34 per cent in both September and October, 22 per cent in December, 19 per cent in February 2026 and 6 per cent in March 2026.

“I expect the RBA to cut rates by another 25 basis points on May 20, with some risk of a larger cut (35 bp would be ideal) but in the absence of a sudden sharper downturn in global conditions a 50bp cut appears unlikely,” David Robertson from Bendigo Bank said.

“News from abroad on the tariff front has improved. But the economy will still need to weather a sizable ‘uncertainty shock’ through Q2 at least. With upside inflation risks dissipating, the RBA can afford to lend the economy some more support,” Sean Langcake of Oxford Economics Australia said.

However, twelve of the original 41 polled economists said they forecast a hold in tomorrow’s decision.

“The labour market remains tight, driving above trend wages growth. With no productivity growth, this puts unit labour costs above the RBA’s inflation target,” Malcolm Wood of Ord Minnett said.

“US policy randomness is settling into a pattern of reversals which make US and global slowdowns less likely,” Mark Crosby from Monash University.