Expect another 25bp cut by RBA in H1 2015

11 February 2015, 09:54
Andrius Kulvinskas
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 According to Westpac, RBA might cut rates by 25bp in its March meeting, with the inflation outlook posing no barrier for any easing.

Key Quotes

“The RBA confirmed the end of the “ period of stability in interest rates” in Feb with a 25bp cash rate cut, to 2.25%. Most importantly, the Board judged domestic demand growth is “quite weak”.”

“Westpac expected the Feb easing and looks for another 25bp cut in H1.”

“Our base case is the March meeting, with the inflation outlook posing no barrier to further easing and no compelling reason to wait for specific data on domestic demand.”

“Spending looks set to remain subdued for some time, while the RBA expects the unemployment rate to “peak a little later” than they expected late 2014.”
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