Rate cut probabilities

So, the market is daily repricing the probability of the July rate out of existence:

We’re down to a one in four shot. This will be old news to regular readers.

More interesting are the probabilities attached to future RBA meets:

That’s a 94% chance of 25bps in August and again in September and high probability attached to 2.50 rates by March next year

More aggressive than I think given a steady state economy but in the ball park.

David Llewellyn-Smith
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Comments

  1. I’m always fascinated by the Australian fixation with the interest rate decision. It’s a national obsession.

  2. high probability attached to 2.50 rates by March next year

    The ABS has reported a GDP and jobs boom.
    Is this the market’s way of saying it doesn’t believe what the ABS has told us?

    • GDP and a mining jobs boom does not include high inflation and a healthy economy. The $A dollar remains to high, oil price is falling along with inflation. Majority of Australian business outside of mining in real trouble. The ABS stats need to be understood. Australian interest rates are to high.
      The market and the RBA are now seeing the damage that higher rates have done and are still doing to the Australian economy as a whole. Rates need to fall.
      RBA is always behind the curve IMO

  3. “Is this the market’s way of saying it doesn’t believe what the ABS has told us?”

    Elementary my dear Watson