Four or more interest rate cuts through 2025

ANZ has the chart. RBA cash rate futures are pricing four rate cuts through 2025, the fewest anywhere thanks to Alboflation:

I agree that the Aussie easing cycle will start more slowly than elsewhere but it will catch and overtake in due course.

As China fades way, commodity prices continue to collapse. The following chart is based upon $50 iron ore, $100 coking coal, $75 thermal coal and $7 LNG:

The federal budget has forecast a 12% fall in the terms of trade through 25/26. It is likely to be closer to 40%.

This will end Canberra’s (and the states) fiscal splurges and the Aussie bedpan economy will drop into an austerity sinkhole.

All that will be left is more immigration and higher house prices thanks to deep interest rate cuts.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.