‘Shouldn’t get one’: Fury over interest rate cut hopes

Desperate Australians should receive three more target cuts before improving their serious cost of living situation.

That is according to one of Australia’s main economists who said that the February RBA rates has done little to relieve financial stress in homes throughout the country.

However, the debate continues to bubble about whether it is the best for Australia’s economy as a whole, at this time.

Stephen Koukoulas, considered by Australia’s financial review, as one of the most influential economists in Australia, believes that the Australians who fight will have three more target cuts in 2025.

More: the great Australians of money trap are falling in love

Speaking in the podcast of Mary Brick Road by Mark Bouris, Koukoulas, he said that the February rate cut had done almost nothing to relieve the financial burden of the Australians and little will until the RBA continues to reduce the cash rate.

Only then of Australians throughout the country can throw the money gorilla care about their backs.

“People are not changing the way they spend,” Koukoulas said, former high -level economic advisor of the prime minister’s office.

“We need to see three changes in the rate before seeing a real change in the relief of the interest rate.”

Koukoulas said that the vast majority of Australians are still struggling with financial conerns despite general improvements in the economy, including a reduction in inflation.

“Interest rates are still very restrictive in the economy,” he said.

“They are still causing financial stress through the problem of the cost of living. Inflation has fallen, but the cost of living is still a lot of mortgage capacity.

“[Worries about] The cost of living has not gone, it is still bad. “

More: in no way! What 75PC of Australians do not want at home?

Despite the big headlines on the 25 basic points of February reduced to the RBA cash rate, reducing 4.1 percent, Koukoulas said it did not move the needle for Australian households.

“Consumers are not stupid,” he added.

“They know what is happening. They see the first 25 [basis] needles [cut] And think “I don’t change my life”, the second: “That’s better”, but it is only when you get three or four cuts that change. “

Such perspective corresponds to the survey that indicates that Australians plan to bend down this year and save instead of spending on a trend that is expected to drag companies and hinder economic growth and properties prices.

The February rate cut has certainly not led to a change in conditions in most real estate markets throughout the country.

The good news for mortgage holders is that Koukoulas believes that Australians will get what they want: four rates cuts in total at the end of 2025 or a probable total of 100 basic points. That will begin with another rate cut when the RBA meets again on May 20.

More: quantity of shock that costs to sell your home

Real relief may not flow until 2026, but Koukoulas trusts that it will come.

“I think the RBA will deliver the rate cut that has a price in the market,” he said.

“We are going to see a series of three rates cuts. [February] It is only that figurative sigh of relief, it is later when the relief of cash flow arrives. “

Koukoulas said that RBA would probably make movements to reduce interest rates given an improved economic perspective, a stable political environment and the mild inflation.

However, hey, he says that the RBA may not go far beyond four rate cuts in the current cycle given the global uncertainty. The United States Federal Reserve adopted a ‘wait and see’ approach earlier this month, when it kept the fees waiting in the range of 4.25 percent to 4.5 percent.

In some sectors, the February cut of RBA, seen as an appeasement for the Labor Government before the federal elections and Bouris echoed the thoughts of several main economists on whether the cash rate should have reduced at all.

More: the terror reason to the Australians are giving pets

Those thoughts were based on the fact that the average index of cut -up consumer prices of Australia, which takes the view of the underlying inflation by reducing the effect of irregular or temporary price changes that can affect the CPI, was 2.9 percent in the first 2025 QUTER.

That is just inside the RBA target inflation band of two to three percent.

As a result, rates cuts could RBA’s ability to maintain inflation, which has been a great concern for several years, under control.

“There was no way we should obtain a fees cut, if you observe the December quarter and even the rooms before that. We should not get a fees cut, it is not in the band,” Bouris said.

Bouris appointed the respected economist Chris Joye as a main figure that had questioned the cutting movements of the RBA rate.

After the course of the February rate, Joye wrote in the AF, that the RBA had “ignored its own numbers.”

“To avoid the potential for deep rate cuts of 100 basic points or more suddenly the problem of central elections, Martin Place has leaned back this week to rule out their own new neutral numbers,” Joye wrote.

Bouris also said he had heads with federal treasurer Jim Chalmers about several contentious economic problems, including inflation and productivity.