Domain Group's Andrew Wilson predicts RBA will cut rates further
While the majority of experts predict the Reserve Bank of Australia (RBA) will begin to raise interest rates from next year, the senior economist for Domain Group's Australian Property Monitors, Andrew Wilson, is expecting one more cut.
Every expert in the latest Reserve Bank Survey from Finder, including Wilson, predicted rates to remain on hold today. Of these experts, 91% expected rates to start rising in 2015, with two expecting hikes from 2016.
Wilson, however, predicts the next cash rate movement to be down, cutting the current 2.5% to a new record low.
He further expects the peak of the next rate cycle to be 3.5% during 2018, with rates to start falling again from 2019.
“Mixed signals remain although bias now turning to the downside,” Wilson explained.
He said that the Reserve Bank is waiting for the general economic climate to crystalise.
With house prices now falling, inflation low, unemployment, a high dollar, a weaker share market and rising concerns over the global economic outlook, Wilson's believes this may push the RBA to make one more cut.
