{"id":716610,"date":"2026-06-05T09:11:24","date_gmt":"2026-06-05T09:11:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/716610\/"},"modified":"2026-06-05T09:11:24","modified_gmt":"2026-06-05T09:11:24","slug":"cba-forecasts-rba-interest-rate-cuts","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/716610\/","title":{"rendered":"CBA forecasts RBA interest rate cuts"},"content":{"rendered":"

The latest Australian interest rate futures pricing suggests that the Reserve Bank of Australia (RBA) will increase the official cash rate once more this year, taking it to a terminal peak of 3.60%.<\/p>\n

However, Australia\u2019s largest bank and mortgage lender, CBA, differs from this view, now forecasting that the RBA will remain on hold at 3.35% until early 2027, followed by rate cuts at next year\u2019s May and August monetary policy meetings:<\/p>\n

\"CBA<\/p>\n

However, in arriving at its central forecast, CBA acknowledges that \u201cthere is a degree of uncertainty around the cash rate outlook\u201d and that \u201cthe risks to this outlook are tilted towards the cash rate remaining higher for longer\u201d.<\/p>\n

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I believe the CBA is correct in the view that we have likely seen the end of rate hikes. While inflation remains above the 2% to 3% target band, the RBA would likely take solace in the fact that the housing market has cooled dramatically, with values now trending lower in the national capital cities.<\/p>\n

\"Trimmed<\/p>\n

The nation\u2019s unemployment rate is also rising faster than the RBA had forecast. At the same time, the economy looks to be entering another per capita recession following a 0.1% decline in per capita GDP in the March quarter.<\/p>\n

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\"Unemployment<\/p>\n

Therefore, the data suggest that the economy is weaker than the RBA expected and that monetary policy is already tight.<\/p>\n

For months, I have argued<\/a> that the RBA would tighten too much this year and then be forced to cut next year as the economy teeters on the brink of recession.<\/p>\n

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CBA now appears to share a similar view.<\/p>\n","protected":false},"excerpt":{"rendered":"The latest Australian interest rate futures pricing suggests that the Reserve Bank of Australia (RBA) will increase the…\n","protected":false},"author":2,"featured_media":716611,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-716610","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/716610","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=716610"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/716610\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/716611"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=716610"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=716610"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=716610"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}