The ANZ has given up hope of any interest rate cuts from the Reserve Bank for the rest of the year. It is the first of the four majors to rule out any prospect of a rate cut for the rest of 2024 from the central bank.
Head of Australian economics at the ANZ, Adam Boynton, told the Herald Sun that household and government spending, the latest jobs figures, and a stubborn inflation rate meant a rate cut was further away than previously hoped.
Economic Factors and CPI Impact
“The stronger than expected Q1 CPI also makes it hard to see the RBA being sufficiently confident that inflation will return to and stay in the band by the time the November meeting comes around,” he said. “It’s not that monetary policy isn’t working. It is. The economy has clearly slowed, particularly across private final demand. It’s for this reason that we think a rate hike remains unlikely.”
“However, getting an appropriate balance between the level of demand and supply is likely to take a little longer than expected given the three factors outlined above.”
