20 May The RBA cuts again and becomes more dovish
Key Points
- As widely expected, the RBA cut by 0.25% taking its cash rate to 3.85%. This is the second rate cut in this easing cycle.
- The RBA remains “cautious about the outlook”, but its overall commentary appears more dovish leaving the door wide open for further easing.
- We expect the RBA to cut again in August, November, and February taking the cash rate to 3.1%. There is now close to a 50% probability of another cut as early as July though.
- The ongoing rate cutting cycle should help underpin a modest further pick up in Australian economic growth to around 1.8%yoy, but with the tariff threat posing a big downside risk.
