ANZ Revises Interest Rate Forecast : ANZ has become the third of the big four banks to delay its forecast for when the Reserve Bank of Australia (RBA) will start cutting interest rates.
The bank now predicts the cash rate, currently at a 13-year high of 4.35%, will not ease until May, aligning with projections from Westpac and NAB.
“May is emerging as a more realistic timeline for the first cash rate cut, but it’s still possible this could be pushed back even further,” said Canstar data insights director Sally Tindall.
ANZ Delays Forecast for Reserve Bank Interest Rate Cuts
“The data-dependent RBA has no definitive roadmap for the cash rate’s future, and if you have a mortgage, neither should you,”
she added.
ANZ has also revised its outlook for 2025, now anticipating just two rate cuts instead of three.
This adjustment would bring the cash rate down to 3.85% by year-end, a level still significantly higher than most of the past decade.
“ANZ’s updated forecast reflects a potential reality where fewer cash rate cuts occur than initially hoped,” Tindall said.
Despite Australians demonstrating resilience during one of the steepest cash rate hikes in history,
Revised Predictions Push Cash Rate Easing to May 2025
there’s a growing likelihood that the neutral cash rate will settle higher than many economists expected.
If only two rate cuts materialize in 2025, borrowers may face an average mortgage rate that dips to just under 6%.
While NAB and Westpac also predict the first rate cut in May, they anticipate five and four total cuts by the end of 2025, respectively.
Commonwealth Bank remains the outlier, holding to its February forecast for a first cut and expecting four rate reductions throughout the year.
ANZ’s adjustment follows RBA
Governor Michele Bullock’s comments highlighting persistently high core inflation and an unemployment rate that doesn’t yet support a reduction in the cash rate.
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