Reserve Bank of Australia Expected to Initiate First Rate Cut in Over Four Years

Economists anticipate a 25 basis point reduction to 4.10% at the February 18 policy meeting as inflation falls within target range.

• A Reuters poll indicates over 90% of economists expect the Reserve Bank of Australia (RBA) to cut the cash rate by 25 basis points to 4.10% next week.
• This would mark the RBA's first rate cut since 2019, influenced by easing inflation, which has dropped to 2.4%, within the central bank's 2-3% target range.
• The majority of experts predict a gradual rate-cutting cycle, with forecasts suggesting rates could drop to 3.60% by September 2025.
• Strong labor market conditions and a robust housing sector may temper the pace of rate cuts, as the RBA aims to balance economic growth with inflation control.
• Homeowners could see significant savings on mortgage payments if lenders pass on the anticipated rate cut in full.

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