Latest news with #WarrenHogan
Sky News AU
23-05-2025
- Business
- Sky News AU
Aussie homeowners could face 'rate hikes again' as inflation risks loom, Judo Bank's chief economist Warren Hogan warns
Aussies who are beginning to feel some financial relief from the recent rate cuts could face mortgage pain again down the track as inflation risks loom, a leading economist has forecasted. The local economy still faces challenges despite inflation falling into the Reserve Bank of Australia's target band and unemployment continuing to sit near historic lows. However, if the large government spending of the past few years continues and the associated inflation risks grow, Aussies could face mortgage stress, Judo Bank's chief economist Warren Hogan said. He also noted economic pressures from overseas, arising from the US-instigated trade war, which could be reason for the RBA to deliver more cuts. 'These challenges that we've been talking about for a number of years, whether it's the rapid growth in government spending or whether it is the inflation pressures sitting in the background, aren't going away,' Mr Hogan said. 'So, if the worst doesn't play out overseas, I fear that we're not going to get much more than that one or two rate cuts. 'On an economy that recovers and continues to grow next year, we could be talking about rate hikes again at some stage. 'There's actually a positive economic story there, but it's got inflation risk with it.' Mr Hogan made his call as the Australian economy begins to recover with consumer spending, wages and business investment rising from the lower levels seen when post-pandemic cost of living pressures hit. After the RBA delivered its second rate cut of 2025 on Tuesday, the central bank's governor Michele Bullock said she was 'confident' in the decision, but noted she remained on watch for economic uncertainty from President Trump's 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. "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." The Reserve Bank of Australia on Tuesday lowered the cash rate from 4.1 per cent to 3.85 per cent in a move largely predicted by money markets. Tuesday's cut follows the central bank lowering the cash rate in February 0.25 per cent from 4.35 per cent, where it was held for almost 18 months to stamp out high inflation. Commonwealth Bank of Australia and Westpac each expect two more 0.25 per cent interest rate cuts in 2025 to bring the cash rate down to 3.35 per cent. ANZ expects two consecutive cuts, bringing the cash rate to 3.35 per cent in August, while NAB expects three cuts for a terminal cash rate of 3.1 per cent in November.
News.com.au
23-05-2025
- Business
- News.com.au
RBA focusing on the trade ‘disruptions' made by Trump's tariffs
Now Playing Judo Bank Chief Economist Warren Hogan discusses the Reserve Bank's decision to cut interest rates by 25 basis points to 3.85 per cent. 'The RBA has had a big shift this week – they've had really started to worry about the global scene and the disruptions to trade from these tariffs that the Trump administration announced,' Mr Hogan told Sky News Australia. 'Although financial markets and trade negotiations all seem to be sort of stabilising and moving in a more settled way, they remain focused on this as the big risk.
Sky News AU
19-05-2025
- Business
- Sky News AU
‘Disastrous precedent': Warning for Labor over its super tax proposal
Judo Bank chief economist Warren Hogan has warned that if Labor doesn't 'isolate' its new tax to just super then it would be a 'disastrous precedent'. 'The problem with unrealised gains for the great majority of Australians is they don't have money just sitting on the sidelines ready to pay tax to the ATO if their assets go up in value,' he told Sky News Australia. 'To do it more generally is, I think, going to have a massive backlash.' Mr Hogan advised the Albanese government to look at 'stopping the growth in spending' and 'leave the taxes alone' for the moment.
Yahoo
19-05-2025
- Business
- Yahoo
Economist issues dire RBA interest rate hike warning: 'Back in play'
A top economist has warned Aussie mortgage holders to prepare themselves for interest rate hikes. The Reserve Bank of Australia (RBA) is expected to cut the cash rate tomorrow, but it could be the last rate cut for 'some time'. The central bank cut the cash rate by 25 basis points to 4.10 per cent in February, marking the first cut in more than four years. Judo Bank chief economic advisor Warren Hogan told Yahoo Finance at the time that it was still too early for a cut and the board risked driving up inflation. Now the EQ Economics managing director is warning that the 'window for interest rate cuts is closing'. He expects the RBA will likely announce a 25 basis point cut this week, with the case for a supersized 50 basis point cut dissipating over the last two weeks. RELATED First-home buyer's money-saving tactic as RBA interest rate cut set to fuel property price boom Daunting retirement 'squeeze' about to hit generation of Aussies: 'Hidden cost' Australians suffer as Bunnings' answer to housing crisis 'idles': 'Ready to go' 'We will probably get one this week but in the absence of a tariff-induced global shock, we are unlikely to see any more cuts after that,' Hogan wrote in an opinion piece for The Australian Financial Review. 'Indeed, the natural rhythm of the economic cycle suggests rate increases could be back in play before too long.' All of the Big Four banks are expecting an interest rate cut tomorrow, with NAB forecasting a jumbo 50 basis point are expecting a 25 basis point rate cut as a 'done deal', which would take the cash rate below 4 per cent to 3.85 per cent. Markets expect a further one or two rate cuts over the rest of the year, which would take the cash rate down to around 3.5 per cent. Hogan said this seemed like a 'reasonable expectation', given the RBA's message after the February board meeting, which implied it could bring the cash rate down to a neutral level, around 3.5 per cent, if all goes well. But he said there were factors standing in the way of more interest rate cuts. 'With underlying inflation still running at the top of the target band and the private economy showing signs of gradual recovery in late 2024 and early 2025, there is no strong case to take policy into a genuinely stimulatory stance,' he said. Underlying inflation, the RBA's preferred measure, increased by 0.7 per cent, with the annual rate easing to 2.9 per cent, within the RBA's 2 to 3 per cent target band. Hogan noted the RBA now waited until there was 'hard evidence' in the economic data that monetary policy needed to change, and was taking 'transparent but late' policy action. He said this means Aussie will have to wait until later this year to see if the RBA will be forced to move to montetary policy tightening, in other words, interest rate hikes. 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 higher than the 20,000 economists had expected. VanEck head of investments Russel Chesler said the unemployment rate was like a "boulder" lodged in the economy's path and could be a factor standing in the way of more cuts. "It has barely moved in three years, even throughout the RBA's tightening cycle, and this has contributed to the stickiness of services inflation," he said. 'With continuing low unemployment rate and wage growth having accelerated to 3.4 per cent, further falls in inflation will be limited – there is actually a risk of inflation increasing.'The latest data shows inflation is within the RBA's target range, but it won't take much to push it back up past the 3 per cent mark.' Chesler thinks a 25 basis point cut on Tuesday is the 'most likely outcome' but doesn't think it is 'strictly necessary based on current macro conditions, including the tight labour market, resilient retail sales and rebound in house prices'. 'For further cuts to occur this year we will need to see a change in the economic landscape, particularly on the employment front,' said Chesler. The majority of experts surveyed by Finder this month expect a cash rate cut on Tuesday. Three in four experts forecast two or more cuts in the next 12 months, with 56 per cent predicting cuts in July and August.
Sky News AU
15-05-2025
- Business
- Sky News AU
‘Cherry picking taxes': Labor's plan to tax unrealised gains will have ‘unintended consequences'
Judo Bank Chief Economist Warren Hogan says the Labor Party's plan for 'cherry picking' taxes will cause 'unintended consequences' for Australians. 'The bottom line is that this is a government that is seeking new ways to raise revenue ... because their spending, and the spending growth, has been pretty persistent since they came into office three years ago,' Mr Hogan told Sky News host Sharri Markson. 'When you start cherry picking taxes, without a broad review of the whole system, there's a lot of unintended consequences, and often the actual tax itself can be very messy, which this one's proving to be.' Mr Hogan suggests the Labor government is 'looking for whatever they can' to fund their spending.
