Get the Finder app 🥳

Track your credit score, free

Free

The Reserve Bank holds the cash rate at 1.50% for the 28th time, while most experts predict further cuts

Posted: 5 March 2019 2:30 pm
News

Two professionals looking at statistics.

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.

Need a home loan? Compare your options

Latest home loans headlines

Image: Shutterstock

Get more from Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site