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Interest Rate Cut Predictions: Economists Flip Coins, Call for Relief

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Following a dip in inflation, major banks and economists anticipate the RBA will cut interest rates in July, offering potential relief to mortgage holders.

If Australia’s economy were a reality show, this week’s plot twist is: “Will they or won’t they?” Economists from all four big banks—ANZ, CBA, NAB, and Westpac—now expect the Reserve Bank to cut interest rates in July, citing softer inflation data, weaker consumer spending, and a nation collectively clutching its wallets.

It’s a sudden tonal shift.

Just months ago, the RBA was warning of stubborn inflation and dragging its feet on cuts.

Now, post-CPI data showing inflation easing more than expected, analysts are practically pencilling in a 25 basis point drop.

The banks, famously cautious when not talking up their quarterly profits, are harmonising their forecasts like a boy band that just reunited.

But forecasting is not policy. The RBA hasn’t confirmed anything.

And while economists love a chart and a model, real people are more concerned with mortgage repayments that have ballooned since 2022, rental costs that border on absurd, and groceries that now require payment plans.

Rate cuts feel less like a financial decision and more like a moral obligation.

The data supports the optimism, at least on paper.

Core inflation dropped to 3.5%, retail turnover slowed, and household sentiment remains in the basement.

Combine that with a global trend toward easing monetary policy, and Australia’s outlier status on high rates is looking shaky.

The pressure is building. Still, the Reserve Bank is famously cagey.

Governor Michele Bullock has so far refused to signal clear timing, sticking to phrases like “data-dependent” and “measured.” In a public desperate for clarity, that’s economist-speak for “shrug emoji.” The human side of this is harder to chart.

Mortgage holders have weathered 13 rate hikes since May 2022.

Many are maxed out, cutting essentials to meet repayments, and anxiously watching every RBA meeting like it’s a blood pressure test.

A rate cut won’t undo all the pain—but it would signal that the worst may be behind us.

Yet there’s a sting: it took this much suffering to even get the conversation started.

And for renters and non-homeowners, a rate cut might not bring relief at all—some economists say it could fuel another round of asset inflation.

📝 Clara’s Cut: A predicted rate cut isn’t a guarantee.

But after two years of pain, even a whisper of relief feels like oxygen.

Let’s hope the RBA is listening—not just to markets, but to the millions stuck in the financial undertow.

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