RBA starts cutting rates - what are the implications?

Please click here to read Shane Oliver's views on the RBA decision to start reducing interest rates.

Key points raised are:

  • As widely expected the RBA cut it's cash rate to 4.1% from 4.35% after 13 rate hikes reflecting more confidence that inflation is moving sustainably towards the 2-3% target
  • However the RBA noted that it is cautious on prospects for further policy easing
  • We expect the RBA to cut again in May and August taking the cash rate to 3.6% this year with another cut next year
  • The start of a gradual easing cycle should held provide support for shares and home prices, albeit some of the good news on rate has already been factored in.