Millions of Aussies rejoice due to upcoming interest rate cuts in 2024
- Replies 21
The year 2024 could bring much-needed relief to millions of Australians struggling with inflation as economists and financial markets predict a significant drop in interest rates.
This long-anticipated change could mean more money in your pocket and less stress about mortgage repayments and other loans.
The official cash rate reportedly concluded 2023 at a hefty 4.35 per cent, leaving many Aussies feeling the pinch.
However, the financial markets are optimistic, with a 25 per cent chance of an interest rate cut by March 2024.
The predictions for a cut by June are even more promising, with finance traders forecasting that the Reserve Bank of Australia (RBA) will slash the cash rate twice before the end of the year.
This optimism is largely influenced by the financial climate in the United States.
In mid-December, the US Federal Reserve indicated that its cycle of increasing interest rates has likely reached its peak.
Predictions suggested that interest rates in the US will fall five times in 2024, with similar trends expected in the UK and Europe.
However, economists from the ‘Big Four’ banks Down Under are exercising caution.
They suggested that interest rate cuts may take longer to materialise.
The Commonwealth Bank of Australia (CBA) and Westpac are forecasting that the first interest rate cut may not come until September 2024.
ANZ is slightly more conservative, predicting that the RBA will deliver the first rate cut in November 2024.
Meanwhile, NAB is the most pessimistic—forecasting interest rates won’t start to fall until December this year.
Despite these predictions, Aussies may still have to weather one more rate rise.
The RBA may increase interest rates when it meets for the first time this year on Tuesday, February 6.
Minutes from the last RBA board meeting on December 5, 2023, show the bank is willing to increase rates again if inflation for the past three months comes in above its forecasts.
'Members agreed that whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable time frame will depend on how the incoming data alter the economic outlook and the evolving assessment of risks,' the minutes read.
The Consumer Price Index data for the last quarter of 2023, which the RBA uses to assess inflation, is said to be released on January 31.
What are your thoughts on the predicted interest rate cuts? Let us know in the comments below.
This long-anticipated change could mean more money in your pocket and less stress about mortgage repayments and other loans.
The official cash rate reportedly concluded 2023 at a hefty 4.35 per cent, leaving many Aussies feeling the pinch.
However, the financial markets are optimistic, with a 25 per cent chance of an interest rate cut by March 2024.
Financial markets are optimistic about an interest rate cut in 2024. Image source: Freepik.
The predictions for a cut by June are even more promising, with finance traders forecasting that the Reserve Bank of Australia (RBA) will slash the cash rate twice before the end of the year.
This optimism is largely influenced by the financial climate in the United States.
In mid-December, the US Federal Reserve indicated that its cycle of increasing interest rates has likely reached its peak.
Predictions suggested that interest rates in the US will fall five times in 2024, with similar trends expected in the UK and Europe.
However, economists from the ‘Big Four’ banks Down Under are exercising caution.
They suggested that interest rate cuts may take longer to materialise.
The Commonwealth Bank of Australia (CBA) and Westpac are forecasting that the first interest rate cut may not come until September 2024.
ANZ is slightly more conservative, predicting that the RBA will deliver the first rate cut in November 2024.
Meanwhile, NAB is the most pessimistic—forecasting interest rates won’t start to fall until December this year.
Despite these predictions, Aussies may still have to weather one more rate rise.
The RBA may increase interest rates when it meets for the first time this year on Tuesday, February 6.
Minutes from the last RBA board meeting on December 5, 2023, show the bank is willing to increase rates again if inflation for the past three months comes in above its forecasts.
'Members agreed that whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable time frame will depend on how the incoming data alter the economic outlook and the evolving assessment of risks,' the minutes read.
The Consumer Price Index data for the last quarter of 2023, which the RBA uses to assess inflation, is said to be released on January 31.
What are your thoughts on the predicted interest rate cuts? Let us know in the comments below.
.png){kind=icon}
