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MNI: RBA Labour Market Rethink Seen Making Cuts More Distant

Economists are debating the RBA's updated view on excess demand and the labour market.

MNI (MELBOURNE) - The Reserve Bank of Australia’s hawkish reassessment of the labour market, which it now sees as tighter than it had previously considered, means investors are over-estimating the probability of swift rate cuts, former officials and economists told MNI.

The RBA is only likely to cut the cash rate from 4.35% in Q1 2025 after it reviews 2024 Q3 and Q4 data, said Justin Fabo, founder and head of research at Antipodean Macro and former head of international financial markets at the RBA, despite market pricing for 4.08% by December.

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MNI (MELBOURNE) - The Reserve Bank of Australia’s hawkish reassessment of the labour market, which it now sees as tighter than it had previously considered, means investors are over-estimating the probability of swift rate cuts, former officials and economists told MNI.

The RBA is only likely to cut the cash rate from 4.35% in Q1 2025 after it reviews 2024 Q3 and Q4 data, said Justin Fabo, founder and head of research at Antipodean Macro and former head of international financial markets at the RBA, despite market pricing for 4.08% by December.

Keep reading...Show less