Australia & New Zealand Economics

Australia & New Zealand Economics Weekly

7 December, 2018

RBA not ready to cut

The financial markets are now pricing in a small chance of a rate cut by the RBA next year following the release of weak GDP data this week. But while we expect GDP growth to slow further next year, we think that the improvement in the labour market since the RBA’s last cut in 2016 has raised the hurdle for additional easing substantially. Rather than lowering rates, we think that the RBA will simply wait longer before hiking rates than most anticipate.

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