{"id":5506,"date":"2024-11-07T10:05:03","date_gmt":"2024-11-07T00:05:03","guid":{"rendered":"https:\/\/financialplus.com.au\/?p=5506"},"modified":"2024-11-07T10:05:03","modified_gmt":"2024-11-07T00:05:03","slug":"can-we-expect-the-rba-to-cut-back-rates-this-summer","status":"publish","type":"post","link":"https:\/\/financialplus.com.au\/can-we-expect-the-rba-to-cut-back-rates-this-summer\/","title":{"rendered":"Can we expect the RBA to cut back rates this summer?"},"content":{"rendered":"
\u201cAre we there yet?\u201d It\u2019s the catch cry of kids on long summer road trips, and it could just as easily apply to homeowners waiting for much-anticipated rate cuts.<\/p>\n The good news is that we appear to be getting closer \u2013 with many banks forecasting a possible RBA rate cut by the end of summer.<\/p>\n The Reserve Bank of Australia (RBA)\u00a0kept rates on hold in November<\/a>, despite\u00a0inflation falling to 2.8%<\/a>, which is well within the RBA\u2019s preferred 2-3% inflation range.<\/p>\n So, what\u2019s holding up rate cuts? And why does it seem like the goalposts keep shifting?<\/p>\n It turns out the RBA is concerned that part of the decline in inflation \u201creflects temporary cost of living relief\u201d (think the\u00a0$300 power bill credit<\/a>).<\/p>\n Basically, the RBA is worried that inflation remains too high and the outlook is still a little too uncertain to make any rate cuts right now.<\/p>\n What the RBA is aiming for, is \u201csustainably returning inflation to target\u201d (that\u2019s the 2-3% band). And it cautioned this could still be a way off.<\/p>\n That makes the chances of a festive season rate cut at the RBA\u2019s next meeting (December 10) unlikely.<\/p>\n For the record,\u00a0RBA Governor Michele Bullock<\/a>\u00a0didn\u2019t give any hint on the direction of interest rates \u2013 either up or down.<\/p>\n The banks, however, are a lot more open \u2013 and optimistic \u2013 about their interest rate expectations.<\/p>\n The\u00a0Commonwealth Bank<\/a>, which had previously tipped a December rate cut, is now pencilling in the following meeting (February 18) for the first of what could be a string of rate cuts.<\/p>\n Westpac,<\/a>\u00a0ANZ and AMP also all anticipate the RBA to cut the cash rate as early as February, while\u00a0NAB<\/a>\u00a0is forecasting a rate cut as early as March 2025.<\/p>\n While all this may make for a happy new year, February may seem a long way off \u2013 especially if you\u2019re sweating on a rate cut (and remember, there are no guarantees).<\/p>\n But you may not have to wait around for the economy or the RBA to shift in your favour.<\/p>\n It could be possible to give yourself a rate cut in time for Christmas.<\/p>\n According to Mozo, growing expectations of future rate cuts have seen a number of lenders take the knife to their variable rates, with some\u00a0cutting their variable rates below the 6% mark<\/a>.<\/p>\nWith just one RBA rate decision left for 2024, homeowners may be holding onto hopes of a summer cut. We look at when rates may start falling \u2013 and how you could possibly give yourself a rate cut before Christmas.<\/strong><\/p>\n
Rates on hold for November \u2026<\/h3>\n
Banks expect rates to fall in early 2025<\/h3>\n
Why wait? Variable rates are already falling<\/h3>\n