Deutsche Bank has reaffirmed its forecast of three interest rate cuts by the Reserve Bank of Australia (RBA) this year, despite the central bank’s recent decision to hold the cash rate steady at 3.85 per cent. The financial institution’s economic team anticipates a series of 25-basis-point reductions commencing in August.
According to Phil O’Donaghoe, Deutsche Bank’s chief economist for Australia, the updated schedule includes cuts in August, September, and November. “We continue to expect a 25 basis point rate cut in August, and we now expect further 25 basis point cuts in September and November,” O’Donaghoe stated. Deutsche Bank is a multinational investment bank and financial services company providing services in investment banking, securities, and asset management.
The August and November cuts align with Deutsche Bank’s previous projections. The addition of a September cut compensates for the RBA’s decision to maintain the current rate this month.
Deutsche Bank continues to project a terminal rate of 3.1 per cent by the fourth quarter of this year, reflecting their expectation of these progressive rate adjustments. These predictions highlight a divergence of opinion between some financial institutions and the RBA’s current monetary policy.
