ICYMI – Westpac revised their RBA forecast, see first rate cut in February 2025

Earlier this week Westpac pushed back their RBA rate cut call to February 2025, from previously in November 2024

• Expects a conservative pace of 25bp cuts per quarter
• New terminal rate forecast of 3.35%, up from 3.10% previously
• RBA seen as more cautious, requiring stronger evidence before easing
• Bank cites RBA’s new analytical tools and focus on full employment indicators
• WPAC forecasts align with RBA on inflation, but more pessimistic on consumption
• Risks: RBA could delay cuts further if inflation surprises to upside
• Alternatively, cuts could come sooner if economy weakens materially

Key quote: “In wanting to be sure, the RBA Board is risking getting too far behind the curve, with inflation undershooting the target and unemployment rising further than strictly necessary.”

The bottom line: WPAC sees RBA as one of the last major central banks to cut rates, but warns of risks in both directions.

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Current RBA:

This article was written by Eamonn Sheridan at www.forexlive.com.