Commonwealth Bank boss Matt Comyn says the Reserve Bank may not cut interest rates until early 2025 because of “persistent” inflation, compounding cost of living pressures for borrowers counting on tax cuts and mortgage relief.The Australian Financial ReviewFinancial markets pushed back their own bets of the likely timing of RBA easing to December, from September.
Locally, annual inflation slowed from 5.4 per cent in the September quarter to 4.1 per cent in the three months to December. Treasury secretary Steven Kennedy told a Senate committee on Wednesday the figure would remain volatile month-to-month as the pace of inflation slowed even further. “The market was getting ahead of itself,” said Schroders head of multi-asset in Australia Sebastian Mullins. “They were a little ahead of themselves here but not as much as the US because the RBA is slightly more behind the curve.”The Australian dollar recoiled by 1.2 per cent to US64.41¢, the biggest daily drop in four months. It steadied at US64.55¢ in afternoon trading.
noting the progress made on cooling prices, but it said it would lift interest rates again if needed. “So if the Fed can delay its cutting cycle, then the RBA can definitely delay its cutting cycle because they don’t have as much to do as other central banks,” Mrs Specchia said.“The market is pricing in the fact that if the Fed cuts less, then the RBA cash rate will stay at this level for longer, perhaps for most of 2024.” UBS expects a rate cut in November.