While some economists are forecasting as many as four more cuts this interest rate cycle, Commonwealth Bank chief economist Luke Yeaman says the Reserve Bank will cut rates just two more times – on July 8 and August 12.
He says he thinks the RBA will want to see how the economy plays out over the next six to 12 months before making another move.
Mr Yeaman says rate cuts could add to the momentum that’s already been seen in house price growth.
The RBA’s interest rate decision will come just one day before US President Donald Trump’s July 9 tariff deadline, and Mr Yeaman says to date, Australia has been very well insulated from the broader shocks. However, he says tariff wars could have some impact on the investment climate and possibly the consumer, but doesn’t think it’s going to derail the economic recovery in Australia over the course of the next year.
He says the CBA will be watching closely to see how consumers and businesses react to tariff changes, but also for any more deterioration of the US economy, which will affect Australia’s biggest trading partner China.
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