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If the RBA’s right, interest rates may not fall for another year. Here’s why – and what it means for next week’s budget
The Reserve Bank is now assuming Australians will see no interest rate cuts this year – and quite possibly none before the next federal election, due next May. That’s a big change compared to just three months ago. Back in February, the Reserve Bank assumed three rate cuts before the middle of the next year. Its newly-updated assumptions have interest rates remaining high for the rest of this year, then declining only slowly, with a cut by May 2025 about as unlikely as it is likely. chart The assumptions are based on financial market pricing, which the bank says is “the best predictor of the future cash rate ... (full story)
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