No economist surveyed by Bloomberg expects the Reserve Bank of Australia (RBA) to cut interest rates next week. All 25 think the cash rate will remain at 1.75%.
However, that all changes when it comes to August.
From 25 expecting no change in July, 24 believe that the cash rate will be reduced to a fresh record low of 1.5% come August 2.
The National Australia Bank is the only one forecasting that the cash rate will remain on hold.
Given it was the main catalyst for the most recent rate cut in May, one suspects that the June quarter consumer price inflation (CPI) report — released on July 27 — will be crucial in determining whether the NAB or everyone else is right.
It’s clear than many see the CPI report as a binary outcome, with another weak quarterly print all but certain to see the RBA cut rates.
It certainly doesn’t sound like a central bank that’s itching to cut rates again, at least based off recent rhetoric.
The inflation report, along with tomorrow’s federal election outcome and ongoing developments relating to Brexit, will also be influential one suspects.
Looking further ahead, JP Morgan and and Morgan Stanley have the most aggressive easing calls, forecasting that the cash rate will be reduced to just 1% by the middle of next year.