Mortgage holders across Australia could be in line for further relief as the Reserve Bank of Australia (RBA) is expected to cut interest rates multiple times before the end of 2025, according to leading economist Stephen Miller.
Miller, market strategist at Grant Samuels Funds Management (GSFM) and former adviser to Paul Keating, told Sky News Australia’s Business Now program that the central bank has the capacity to lower the official cash rate several times over the coming months should economic conditions remain subdued.
“If the sorts of risks that the RBA have been talking about in terms of a deteriorating economic environment, if growth doesn’t lift here, if inflation turns out as they expect and hits the middle of that (2%–3%) band, they can certainly cut rates multiple times before the end of the year,” Miller said.
The comments come ahead of the RBA’s next monetary policy meeting, where the central bank is widely tipped to deliver its third cut this year. A 25-basis-point reduction would take the cash rate to 3.6%, down from 4.35%, where it has sat for nearly 18 months in an effort to curb post-pandemic inflation.
Despite bond traders pricing in a 95% chance of a cut, Miller warned there are still factors that may delay further easing, including persistently low unemployment and stagnant productivity growth.
“I’m not as confident as the bond market, which seems to rate that prospect at about 95%, but I certainly think the balance of probability tilts toward a rate reduction when the RBA meets next week rather than an on-hold decision,” he said.
All four of Australia’s major banks are now forecasting a July cut, with ANZ recently shifting its prediction forward from August following weaker-than-expected retail sales figures. According to Canstar’s data insights director Sally Tindall, the decision by ANZ to join the others signals a marked shift in sentiment.
“ANZ has finally jumped on the July rate cut bandwagon, joining the rest of the big four in tipping the RBA to move on Tuesday,” Tindall said. “That’s a powerful chorus and one borrowers will be hoping hits the right note.”
She added that recent trends supported a rate reduction, with “retail sales soft, inflation well within the target band and the global outlook highly uncertain.”
The RBA’s upcoming decision will be closely watched, with further easing likely to provide a welcome boost to consumer confidence.
