Latest news with #Michele Bullock
Yahoo
a day ago
- Business
- Yahoo
Major banks reveal interest rate cut forecasts ahead of RBA meeting
Australian mortgage holders are expected to receive interest rate relief in days, with the Reserve Bank of Australia (RBA) widely expected to cut the cash rate on Tuesday. This would mark the third cut this cycle, with a 25 basis point cut to bring the rates down to 3.60 per cent. The RBA surprised economists and the country's biggest banks by holding the cash rate at its July meeting, with governor Michele Bullock noting the decision was about 'timing rather than direction'. Bullock said the board wanted to 'wait a few weeks' to confirm inflation was on track. Commonwealth Bank, Westpac, NAB and ANZ say that confirmation has now happened and they are unanimously expecting an August rate Westpac boss flags RBA interest rate cut win for millions in $350 a month boost ANZ hikes home loan interest rates in 'surprise' move ahead of RBA cash rate meeting $65,000 property warning as Aussies set to flood market after another RBA interest rate cut Markets are fully priced in for a 25 basis point cash rate cut on Tuesday, while 91 per cent of experts and economists surveyed by Finder this month also expect a cut. Headline inflation eased to 2.1 per cent in June, down from 2.4 per cent, while trimmed mean inflation came in at 2.7 per cent, down from 2.9 per cent. The unemployment rate lifted to 4.3 per cent in June, up from 4.1 per cent in May, with employment increasing by 2,000 people in have the Big Four banks said? NAB chief economist Sally Auld said the bank expects interest rates to come down over the next six to nine months, with 75 basis points worth of cuts predicted. 'We expect those to be delivered within a reasonably gradual fashion, but one in August, one in November and then a final rate cut in February,' she said. 'And that should leave the cash rate at 3.1 per cent.' CBA senior economist Belinda Allen said the bank expected an August and a November rate cut, with a 'chance of a further rate cut in early 2026'. Allen expects the August rate cut will be a 'straight-forward' decision as the data reinforces the economy is performing as expected. 'We see a consensus decision (9-0) to cut the cash rate in August. This follows the 6-3 decision in July to leave the cash rate on hold,' she said. Westpac chief economist Luci Ellis is also expecting a unanimous decision to cut interest rates in August after inflation data provided 'confirmation' that inflation was on track to return to the 2 to 3 per cent target range. 'If we are correct that the RBA MPB does cut in August, the path from there also looks increasingly likely to line up with our current forecast of cuts in November, then February and May 2026,' she said. ANZ senior economist Adelaide Timbrell also agreed the inflation figures supported an RBA rate cut of 25 basis points in August, with the bank predicting one more cut in November. How many interest rate cuts are coming? Here's how many more cuts the Big Four banks are expecting: CBA: Two more cuts in August and November to bring cash rate to 3.35 per cent Westpac: Four more cuts in August, November, February and May to bring cash rate to 2.85 per cent NAB: Three more cuts in August, November and February to bring cash rate to 3.10 per cent ANZ: Two more cuts in August and November to bring cash rate to 3.35 per cent How much will I save if the RBA cuts interest rates? A borrower with a $600,000 loan today and 25 years remaining could see their monthly repayments drop by $90 following a 25 basis point cut, according to Canstar. Here's how much other borrowers could save per month: $600,000: $90 drop to $3,703 $750,000: $113 drop to $4,628 $1,000,000: $150 drop to $6,171 When will the RBA meet again? The RBA will announce its decision at 2:30pm on Tuesday, August 12. It only has three more meetings remaining after that, on September 29 and 30, November 3 and 4, and December 8 and 9.
News.com.au
29-07-2025
- Business
- News.com.au
Opinion: Reduce executive hours and save 30,000 jobs
ANALYSIS A recent report by Roy Morgan found that about 1.3 million Australians are currently experiencing mortgage stress. They desperately need a rate cut, but for tens of thousands, the only way to get decent mortgage relief may be to lose their jobs. One of the economic factors the RBA monitors closely when making cash rate decisions is unemployment and, ideally, it would like to see unemployment reach 4.5 per cent. Before the July decision to hold, unemployment was still at 4.1 per cent. Of course, the next set of data revealed it had jumped to 4.3 per cent, which meant there were about 30,000 more people out of work. With Australia's labour force around the 13 million mark, we'd need a similar number to lose their jobs again to get to 4.5 per cent. Are you one of the 30,000 odd Aussies who are still needed to take one for the team in order to bring about more mortgage relief? Of course, a rate cut won't do much for you if you have no income. The good news is that the 4.5 per cent figure doesn't need to be achieved immediately. RBA Governor Michele Bullock said she wants to see a gradual easing in employment. 'Having your hours cut is tough, but it's often preferable to losing a job altogether,' Ms Bullock said, while addressing a fundraising lunch last week. I agree. Perhaps we could begin by cutting Ms Bullock's hours so she works four days a week. That would take about $200,000 of potential spending out of the economy, or the equivalent of the jobs of two average wage workers. Ms Bullock would just have to tighten her belt a bit and make do with $800,000 a year. Luckily for her, she doesn't have a mortgage on her own home because she paid it off on a half price interest discount deal for RBA employees. Perhaps also Macquarie Bank CEO Shemara Wikramanayake could pro rata her $24 million earnings and get by on just $20 million a year? It will take a bit of adjustment, but if she scrimps and saves and perhaps packs her lunch a few days a week, she could save the jobs of 40 average Australians and help get relief for those with mortgages. Repeat the process for a few other of Australia's highest paid financial executives and we may actually save a few thousand average jobs. According to the ATO, there are nearly 15,000 Australians earning $1 million a year (bearing in mind, that's 'taxable' income, so likely a fair few more). If each of these went to a four-day week, it would mean 30,000 average salary employees could keep their job without any serious inflationary risk. Regular Aussies trying to pay off mortgages are always the ones who get punished in order to keep inflation under control. But doesn't it make much more sense to reduce the spending capacity of rich people who don't have mortgages?
