Latest news with #SallyAuld
News.com.au
21-05-2025
- Business
- News.com.au
NAB predicts three more rate cuts this year from the Reserve Bank
NAB Chief Economist Sally Auld predicts there could be another three more rate cuts this year after the Reserve Bank finished its second rate cut on Tuesday. 'I think the narrative for the bank is really about trying to work out what the appropriate stance of policy is, given some quite significant shifts in the global backdrop,' Ms Auld told Sky News Business Editor Ross Greenwood. 'A cash rate a little bit above four per cent was continuing to exert a headwind on the broader economy. 'The bank is now clearly far more comfortable with the inflation outlook and also a little bit disappointed by the performance of the consumer so far this year, I think that made the decision that a restrictive policy stance was no longer the right one. 'At Nab … we think they're probably going to choose that middle path and actually anchor towards a neutral policy setting.'
Sky News AU
21-05-2025
- Business
- Sky News AU
NAB chief economist Sally Auld explains why Aussies will see three more rate cuts in 2025 after RBA cut cash rate in May
NAB's chief economist Sally Auld has explained why Aussies could be in line for three more rate cuts this year after the Reserve Bank of Australia delivered its second. The RBA on Tuesday lowered the cash rate from 4.1 per cent to 3.85 per cent in a move largely predicted by money markets. It follows the cash rate being held at 4.35 per cent for almost 18 months as the RBA engineered a 'soft landing' from high post-pandemic inflation. Ms Auld said the reduction of inflation, economic uncertainty from the US-instigated trade war and lacklustre consumer spending meant the central bank would take a 'neutral policy setting'. This means the RBA is taking the middle ground between a restrictive approach, which would see it hold or hike rates, or a stimulatory approach, which means many more rate cuts that would be used if the economy deteriorated. The central bank took the second approach in early 2020 when it reduced the cash rate to 0.1 per cent. 'At NAB, we think (the RBA is) probably going to choose that middle path and actually anchor towards a neutral policy setting and on our estimates, that's another three rate cuts from now,' Ms Auld told Sky News Business on Wednesday. After the new rate cut comes into effect, an Aussie with the average owner-occupier home loan of $659,920 would save $213 monthly and $2,553 annually compared to their repayments in 2024, according to comparison site Finder. Many economists and banks are predicting two more 0.25 per cent rate cuts this year, bringing the total monthly savings to $420 and $5,044 annually compared to last year. If NAB's forecast is correct, the savings could be around $6,300 per year for an average household. Commonwealth Bank of Australia and Westpac are each expecting two more 0.25 per cent interest rate cuts in 2025 to bring the cash rate down to 3.35 per cent. ANZ is expecting three consecutive cuts including the May call, bringing the cash rate to 3.35 per cent in August. RBA Governor Michele Bullock said the central bank's decision was a "confident cut", but noted she remained on watch for economic uncertainty from the global trade war. "I think it's a confident cut in the sense that we think this is the right decision at this point in time," Ms Bullock told reporters after her decision. "Where this leads us in the future is a little more uncertain. I'd have to say probably a lot more uncertain, given everything that's going on."
News.com.au
19-05-2025
- Business
- News.com.au
Aus bank's shock reason for RBA double rate cut call
One of Australia's biggest banks is urging the Reserve Bank to deliver a double rate cut Tuesday to avert a looming shock. Sally Auld, chief economist of the National Australia Bank, believes the RBA board has a unique window of opportunity with inflation dropping to give the economy a jump-start via a much needed double rate cut of 50 basis points – to thwart economic headwinds. Zac Efron's Aussie long lunch haunt is on the market 'While we certainly don't see it as an emergency, the lag in policy action and its impact imply a need to act relatively quickly – particularly when the stance of policy is not right for the prevailing economic conditions,' she told News Corp Australia. Ms Auld, who took over the top NAB economics role in March this year, said 'after hiking rates rapidly as inflation broke out, the RBA has held rates at a high level for an extended period'. 'This effectively put the brakes on the demand side of the economy to ensure inflation returned to a more normal level. Which it has done over the last few months and at the same time the global outlook for growth has softened.' Ms Auld cited two main factors that support a 50bp cut at Tuesday's monetary policy meeting. Inflation 'On inflation, we're now more comfortable that the RBA's underlying measure will return to the middle of their target band by mid-2025.' Global outlook 'On the global outlook, even though trade tensions have thawed in recent weeks, the outlook for global growth is still weaker than before Trump's Liberation Day tariff announcements.' 'We think this weakness, fuelling uncertainty in markets, will reduce inflation even further.' Ms Auld said 'all of this means the RBA no longer needs to keep the brakes on the economy'. Indeed, she said, 'as inflation continues to moderate, lower rates are needed to ensure the labour market and economic activity remains healthy'. 'Importantly, with inflation looking more benign the RBA has the scope to support the economy in the face of any global weakness, as is the current outlook.' Ms Auld said 'recent data shows that the economy has held up relatively well, including the labour market, and for now there appears to be a positive trend in global trade negotiations'. But, she added 'we still think they RBA will want to normalise the policy rate more quickly than before – whether that's in one large change or multiple in quick succession'. Either way, most experts agree borrowers are in for major interest rate relief going forward this year.
Yahoo
17-05-2025
- Business
- Yahoo
Major banks interest rate cut predictions ahead of hotly anticipated RBA call
The Reserve Bank of Australia (RBA) is expected to give mortgage holders much-needed relief when it meets on Tuesday. All of the Big Four banks are predicting interest rates will be cut, with one bank expecting a supersized cut and another rolling back the pace of its rate cut predictions. NAB is sticking to its forecast of a 50 basis point cut by the RBA. Chief economist Sally Auld has argued the current stance on monetary policy was 'too restrictive' and the bank needed to 'catch up' with recent developments. Economist and Yahoo Finance contributor Stephen Koukoulas agrees that a 50 basis point cut was warranted and said the RBA needed to act to rebalance the economy. RELATED Commonwealth Bank boss pours cold water on supersized $181 RBA interest rate cut Coles shopper 'stunned' after getting $50 item free due to little-known rule: 'Insane' Centrelink issues urgent Age Pension eligibility change warning: 'Double check'Commonwealth Bank, Westpac and ANZ meanwhile, think a smaller 25 basis point cut is on the cards for Tuesday, with markets also pricing in the standard cut. ANZ economists updated their RBA cash rate call on Friday and said there was 'less urgency' for the central bank to ease over the coming months. 'In the wake of the US tariff announcements on 2 April we expected 25 basis point points in May, July and August, getting the cash rate to around a neutral level of 3.35 per cent,' ANZ economists said. 'We now expect 25 basis point rate cuts in May and August this year, with the final 25 basis point of easing in Q1 2026. 'That latter cut comes with a little more uncertainty than the 2025 easings.' ANZ said a May cut was likely the 'path of least regret' for the RBA, given the uncertain global background and encouraging inflation figures. It has softened its language and no longer thinks the cut is 'near certainty' but thinks it's 'more likely than not'. Australia's inflation rate rose 0.9 per cent in the first quarter of the year, with the annual rate holding firm at 2.4 per cent. Underlying inflation, the RBA's preferred measure, increased by 0.7 per cent, with the annual rate easing to 2.9 per cent, which is within the RBA's 2 to 3 per cent target band. The unemployment rate remained steady at 4.1 per cent for April, but 89,000 more Australians were in jobs than the month before. This was more than the 20,000 economists had expected, but wasn't enough for the banks to change their calls. CBA, Westpac, NAB and ANZ all expect the RBA will cut the cash rate on Tuesday. They then expect between three and five more cuts in this cycle. Here's what they are forecasting: CBA - Three cuts in May, August and November to bring end of year cash rate to 3.35 per cent Westpac - Three cuts in May, August and November to bring cash rate to 3.35 per cent NAB - Five cuts in May (50 basis points), July, August, November, and February to take cash rate to 2.60 per cent ANZ - Three cuts in May, August and the first quarter of 2026 to bring cash rate to 3.35 per cent A 25 basis point cut would save the average borrower $91 on their monthly repayments based on a $600,000 loan with 25 years remaining, according to Canstar. Three cuts would result in a $268 drop in repayments. A 50 basis point cut would double this and save the average borrower $181 on their monthly repayments. If NAB's prediction is correct and there is a 1.50 per cent drop to mortgage rates by March 2026, this would lower repayments by $526 a month based on that $600,000 loan. The board will announce its decision at 2:30pm on Tuesday, May 20. Here are the remaining dates it will meet for the rest of the year: July 7 to 8 August 11 to 12 September 29 to 30 November 3 to 4Sign in to access your portfolio
ABC News
14-05-2025
- Business
- ABC News
Double-size rate cut on the way in May, says NAB chief economist
National Australia Bank's chief economist, Sally Auld explains why she thinks the RBA will cut interest rates by half a percentage point on May 20.
