💸 Major Cuts Expected in Reserve Bank Interest Rates
Australia's mortgage holders may soon breathe easier as the National Australia Bank (NAB) forecasts significant cuts in Reserve Bank interest rates over the coming months.
The bank’s Chief Economist Sally Auld predicts up to 100 basis points in rate reductions by August 2025, with additional cuts likely before early 2026—signaling relief for households battling rising costs.
🔻 Interest Rate Cut Timeline by NAB
Here's what NAB expects for the Reserve Bank of Australia (RBA):
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✂️ 50bps cut in May
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✂️ 25bps each in July and August
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✂️ More reductions in November and February
If realised, the official cash rate would fall from 4.10% to:
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✅ 3.10% by August
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✅ 2.85% by the end of 2025
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✅ 2.60% by February 2026
🧠 RBA Urged to Rethink Approach
According to NAB, the RBA must adjust its strategy:
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🔄 Recognize that inflation risks are now skewed to the downside
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⚡ Shift to a more proactive and bold monetary policy stance
📊 Inflation Data Strengthens the Case
Fresh data from the Australian Bureau of Statistics shows underlying inflation has dropped back into the RBA’s target range for the first time since 2021, boosting confidence in the likelihood of cuts.
🗳️ Election Outcome Brings Market Confidence
NAB also credits Labor’s landslide win in the federal election for providing political certainty, helping create a more stable environment for economic decisions.
🌐 Global Outlook Still Shaky
Despite local positives, NAB is cautious globally, noting:
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🔁 Trump’s trade tariffs continue to impact global markets
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📉 Weaker international economic activity is a growing concern
Even as Bendigo Bank echoes similar forecasts, RBA Governor Michele Bullock remains cautious and has not confirmed any immediate rate cuts.
