Westpac Group’s Post

Inflation eased by more than expected in the December quarter, with the underlying rate ⬇️ to its lowest in three years, according to the latest Australian Bureau of Statistics data. Westpac economists - including Chief Economist Luci Ellis and Senior Economist Justin Smirk - say that this could give the RBA the reassurance it needs to start cutting the cash rate as soon as next month. Read more about the key takeaways from the latest data, below. #AustralianEconomy #Inflation #CPI

Good news for the economy! 📉 Inflation eased more than expected in the December quarter, with underlying rates hitting a 3-year low, according to the latest ABS data. Westpac economists, including Luci Ellis and Justin Smirk, suggest this could pave the way for the RBA to consider cash rate cuts as early as February! What does this mean for you? Read the key insights here #economy #inflation #RBA #WestpacInsights

WBC economists say that with the cooling of inflation - easing more than anticipated, this could give the RBA the reassurance to start cutting the cash rate as soon as next month. For more details, refer to the article here: [Cooling Inflation Puts February Rate Cut Back on the Agenda](https://lnkd.in/g2uq__3h) #interestrates #cashrate

A lot of mixed signals on the "inflation front"... The general sentiment aligns to a decline in interest rates - mostly driven by the expectation of a lower inflation rate. Data however, as noted in the below article, has proven to be a lot more "stickier" than anticipated. The question though, what would the average household do once interest rates do come down? Will it kick into gear SA's consumer based economy and drive inflation from an increase in demand or would they opt to settle their debts and catch up with arears? I hope for the latter, but I expect the former.

The recent Bankrate quarterly survey among economists provided a number of interesting perspectives. In the article, I noted that while lowering lowering interest rates can improve various aspects of the economy, premature rate cuts could also lead to a surge in demand, which could initiate upward price pressure, so we have to be careful on when we raise rates in the upcoming quarters! https://lnkd.in/ezazaRAj

Annual inflation fell to 3.3% in the June quarter, below the Reserve Bank of New Zealand forecast of 3.6%, marking a positive trend. With inflation now at 0.4% for the quarter, we’re seeing significant progress from previous years. This is a sharp contrast to the peak inflation rate of 7.3% in 2022. Kiwibank senior economist Mary Jo Vergara stated, “Today’s inflation print came out below the RBNZ’s forecast, again.” The Reserve Bank aims for a 1-3% range, and we’re on track to meet this. Will this trend continue, and could we see rate cuts by the end of the year? #Economy #Inflation #Finance #Economics #ReserveBank #InterestRates #MarketTrends #FinancialNews #EconomicGrowth #BusinessInsights

Three of Australia’s big four banks are now expecting a rate cut in February following a lower-than-expected inflation data released on Wednesday. https://lnkd.in/g9Ky9DzS

Australia's central bank is poised to initiate a new phase in its monetary policy, as a recent Bloomberg survey indicates that a majority of economists expect the Reserve Bank of Australia, RBA, to begin cutting interest rates next month. This anticipated move would mark the first rate cut in over four years, with many experts projecting a reduction of the cash rate to 4.10% on February 18. This consensus is reflected in financial markets, which are suggesting a 90% likelihood of a rate decrease. The anticipated rate cuts come on the heels of core inflation data that showed more moderation than expected in the fourth quarter, steering closer to the RBA's target range of 2-3%. This has prompted economists from prominent institutions such as Westpac Banking Corp., Royal Bank of Canada, TD Securities, and AMP Ltd. to revise their forecast timelines for the RBA’s easing policies to February. Notably, this decision aligns with the central bank's forthcoming quarterly economic forecast update. Reflecting on the economic journey, the RBA last eased monetary policy in November 2020, when interest rates were brought down to unprecedented lows to counteract the economic challenges posed by previous restrictions. Post-pandemic dynamics, however, led to a tightening cycle beginning in 2022, leaving rates at 4.35% since November 2023, as the bank awaited a steady decline in core CPI. Currently, Australia's economy faces hurdles such as subdued private sector demand and a slowdown in household consumption, all under the weight of high interest rates. Despite these pressures, unemployment levels have remained relatively stable at around 4%. According to Andrew Ticehurst, a senior rates strategist at Nomura Holdings Inc., potential rate cuts are likely to be influenced more by quarterly CPI trends and revised forecasts, rather than drastic changes in the labor market. #FinanceInsights #EconomicForecast #RBA https://lnkd.in/dQQ9Jzp8

The chances of a Reserve Bank interest rate cut in February have improved significantly as price rises ease. So what's behind the inflation pull-back? Get the news that matters to you straight from the source. Download the ABC NEWS app ➡️ https://ab.co/abcnewsapp

Don't believe it. Based on analysts and the Bank of Canada, we are to believe that interest rates are going to start coming down in June of this year. Quite the opposite in the US today where they printed hotter than expected inflation which has analysts down there rethinking if any rate cuts will actually happen in the US this year. What happens down in the US is often mirrored in Canada so my advice is to be wary of any optimism for lower interest rates in the short-term. #inflation #SmallBusinessAdvice