Westpac chief economist Bill Evans predicts a rate cut next week, saying the RBA Bank didn’t act in April because it wanted more time to assess whether the economy was on the forecast path. If the RBA reduced its growth forecast for 2015 and 2016, a rate cut would follow. “Not delivering the assumed cut and lowering the growth forecast would be internally consistent, but hardly a likely policy option for a bank that appears comfortable about inflation but concerned about below-trend growth,” Evans said. NAB chief economist Alan Oster said another rate cut was coming, but in August rather than May.
Written by Tim Graham