The Reserve Bank holds the cash rate at 1.50% for the 28th time, while most experts predict further cuts
75% of the experts in Finder's latest survey now say the RBA will cut the rate again in 2019.
The RBA again held the cash rate at the historic low of 1.50%. It hasn't moved since the RBA cut the rate from 1.75% down to its current level way back in August 2016.
And the bank might cut even further.
Back in December 2018, 78% of our experts predicted the next move to be a rate rise. The situation has now reversed: 75% think the next move will be a cut.
Several experts have called for two rate cuts in 2019 to bring the cash rate down to just 1.00%.
Weaker than expected GDP growth, falling property prices and sluggish wage growth are the main reasons behind this change in sentiment.
But even this is far from certain, and most experts are waiting for more economic data to clarify the situation.
In comments accompanying today's decision, RBA governor Philip Lowe remained fairly positive, saying "The main domestic uncertainty continues to be the strength of household consumption in the context of weak growth in household income and falling housing prices in some cities. A pick-up in growth in household income is nonetheless expected to support household spending over the next year."
AMP Capital's Chief Economist Shane Oliver summed it up succinctly: "Things aren’t yet weak enough to push the RBA to cut but they aren’t strong enough to push it to hike either."
Gateway Bank's Chief Financial Officer Debra Landgrebe said "This is a watching brief, as GDP growth is slower than expected, unemployment is expected to tick up, despite the January jobs report being stronger than expected."
We will all be watching very closely.
For now, the property market's slide in the biggest cities looks set to continue, which is bad for many homeowners and investors and will discourage consumer spending. But it's good news for housing affordability and first home buyers.
And mortgage rates remain very low, making loan repayments a little bit more affordable.
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