Central Banks
RBA Expected to Trail Global Peers in Pivoting to Interest Rate Cuts
- Traders uncertain of RBA cut in next 6 months, unlike Fed, ECB
- Inflation in Australia remains higher than in the US and UK
The RBA’s policy rate is 1 percentage point lower than the Fed’s, underscoring its measured pace of tightening.
Photographer: Brent Lewin/BloombergThis article is for subscribers only.
Australia’s central bank was slow to respond to mounting inflation pressures post-pandemic and money market pricing suggests it will also trail global peers in shifting to rate cuts.
Apart from Japan, Australia is the only other developed economy where traders are uncertain whether policymakers will start lowering the key rate in the next six months. Once the Reserve Bank’s easing cycle begins, the market sees it cutting the least — with two quarter-point reductions against as many as six each for the Federal Reserve and the European Central Bank.