Commonwealth Bank predicts massive rate cuts for Australians: Here's when the country's biggest bank predicts they'll start
- Commonwealth Bank predicts interest rate cuts of 0.75 percentage points
- This would push the Reserve Bank's cash rate back to 3.6 percent
The Commonwealth Bank is now forecasting three rate cuts to take effect in September next year as inflation declines faster than forecast.
Stephen Halmarick, the chief economist at Australia's largest home lender, expects interest rates to be cut by 0.75 percentage points in 2024 and 2025.
This would bring the Reserve Bank of Australia's cash rate back to 3.6 per cent for the first time since May 2023, down from the existing 12-year high of 4.35 per cent.
Mr Halmarick also predicts inflation will fall back to the top of the Reserve Bank's two to three per cent target by the end of 2024 – a year earlier than the RBA predicts.
A slowdown in foreign immigration from the record 518,100 net inflows in the last financial year could also ease pressure on housing.
The Reserve Bank raised interest rates for the thirteenth time in eighteen months in November, contributing to the steepest pace of monetary policy tightening since 1989.
The Commonwealth Bank is now forecasting three rate cuts to take effect in September next year (pictured are Commonwealth Bank ATMs in Sydney)