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ANZ has become the third of the big four banks to push back its forecast for when the Reserve Bank will begin cutting interest rates.
”May is firming up to be a more realistic option for the timing of the first cash rate cut, but there is still every possibility it could be a lot later than this,” Canstar data insights director Sally Tindall said.
“The data-dependent RBA does not yet have a clear path in mind for the future of the cash rate and if you’ve got a mortgage, neither should you.
Not only does ANZ expect the first cut of 2025 to come later than previously thought, it is also now only pencilling two cuts for the year instead of three.
That would bring the cash rate down to 3.85 per cent by the end of the year – still far higher than it had been for much of the last decade.
“ANZ has today put on paper something that could well turn into a reality, which is that we might not get as many cash rate cuts as we had thought or were hoping for,” Tindall said.
“Australians have been incredibly resilient in the face of one of sharpest rises to the cash rate in our history.
“While it’s still highly likely rates will come down from this point, the RBA might find the neutral cash rate ends up being a lot higher than some economists predict.
“If we do only see two cash rate cuts next year, then borrowers should be prepared for an average mortgage rate that will only get down to just below 6 per cent.”
NAB and Westpac both also expect a rate cut in May, but are forecasting five and four total cuts by the end of 2025 respectively.
Commonwealth Bank is the last of the big four to keep to its February cut prediction, and maintains four drops over the course of the year is the most likely path for the RBA.
