<\/p>\n
Families may be in line for relief at the next RBA meeting.<\/p>\n
ANALYSIS<\/p>\n
The noise around the RBA\u2019s next rates decision all seems to be about how many more hikes we can expect this year, but really, the central bank should be considering going the complete other way and cutting in June.<\/p>\n
If it doesn\u2019t, it risks recession at the very least.<\/p>\n
Inflation eased month on month in the most recent CPI figures, released by the ABS in May.<\/p>\n
Meanwhile, the unemployment rate rose to 4.5 per cent, a figure the RBA reportedly was looking for before considering cutting again.<\/p>\n
MORE: Man builds 15m tree on neighbour\u2019s land<\/a><\/p>\n And unemployment may be on the brink of rising further, according to Dale Gillham, chief analyst at Wealth Within.<\/p>\n \u201cAustralia\u2019s unemployment rate has risen to the highest level since 2021, and it could climb further as government spending slows, particularly given NDIS-related jobs have accounted for nearly one in every five new jobs created in recent years,\u201d Mr Gillham said.<\/p>\n \u201cAt the same time, inflation is easing and oil has repeatedly failed to break above the US$100\u2013110 range despite major Middle East tensions, reducing the risk of another inflation shock.\u201d<\/p>\n RBA Governor Michele Bullock will front borrowers next week. Picture: Christian Gilles<\/p>\n Mr Gillham said the RBA now found itself in a challenging position.<\/p>\n \u201cWith households and businesses already feeling the impact of past rate hikes, the RBA risks turning a slowdown into a recession if it waits too long to cut rates,\u201d he said.<\/p>\n Recent years have seen the RBA caught out waiting too long to move, according to some experts.<\/p>\n MORE: Secret Albo told new owners of his old home<\/a><\/p>\n Who can forget the famous suggestion in 2021 by former Governor Philip Lowe that the official cash rate would stay at 0.1 per cent until midway through 2024. <\/p>\n Thirteen rapid fire hikes later and the cash rate instead ended up at 4.35 per cent.<\/p>\n Pundits have since suggested the RBA waited too long to lower rates before it did so in February 2025, and then too long to raise them again.<\/p>\n It\u2019s somewhat of a no-win situation for Governor Michelle Bullock and her board, but Mr Gillham said they need to be decisive this time around.<\/p>\n \u201cThis month\u2019s interest rate decision is shaping up as one of the easiest calls the RBA has had in years, yet the policymakers sit frozen as the economy weakens around them,\u201d he said. \u201cThe warning signs are already here, and the cracks in the economy are becoming impossible to ignore.<\/p>\n Dale Gillham, founder and chief analyst at Wealth Within.<\/p>\n<\/p>\n
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