The Reserve Bank has left interest rates on hold for more than a year now but it's leaving the door open to a rate cut as soon as February. Economists are expecting multiple cuts next year but that may be too late for some borrowers under increasing mortgage stress.
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00:00There was no Christmas rate cut for borrowers, but the RBA Governor says the Central Bank
00:07is making progress.
00:09We're not saying that we've won the battle against inflation yet, but we're saying we've
00:13got a little bit more confidence.
00:14The Reserve Bank left the cash rate on hold at 4.35%, but could mortgage relief be far
00:21away?
00:22No.
00:23I couldn't describe such a scenario.
00:26I honestly don't know if we're going to be cutting in February.
00:28We're going to be looking at the data and be data driven.
00:31If we start to see the unemployment rate creeping higher in the next monthly set of employment
00:37figures, then I think it may cement that February rate cut.
00:41The Reserve Bank has been criticised for being too slow to lift interest rates when inflation
00:46took off a couple of years ago.
00:48Now there's a risk it might be taking too long to bring rates down, especially with
00:52the economy growing at its slowest rate in about three decades.
00:56Do you think there's the risk the RBA might repeat mistakes of the past by moving too
01:02slowly?
01:03If we really thought we had things wrong, we would have moved, David, I think is the
01:06answer to that.
01:07If it weren't for strong levels of migration and government spending, Australia would be
01:12in a recession.
01:13We know the economy's soft.
01:15We know that people are under substantial pressure.
01:17It is clear that this economy is sick and a doctor of spin is not going to fix it.
01:23Once the Reserve Bank gets underway, we'll likely see multiple rate reductions.
01:28I think we could probably see between three to four cuts in 2025.
01:32Even though there's talk of rate cuts in a few months, that's not soon enough for many
01:37borrowers.
01:38We need some action soon.
01:40If it's only talks, it gets us nowhere.
01:43The Reserve Bank faces a difficult balancing act.
01:46If it postpones a rate cut until May, when a general election is due, both sides of politics
01:51could be annoyed.
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