August rate cut possible: economists

August rate cut possible: economists
August rate cut possible: economists

The expectations that interest rates will be at 1.5 percent by the end of this year are mounting.

The official interest rate is now a record low 1.75 percent cut yesterday from 2 percent in what was the first cut by outgoing Reserve Bank governor Glenn Stevens since May 2015.

National Australia Bank was the first of the Big Four lenders to pass on the rate cut in full, followed by Westpac and Commonwealth Bank.

The ANZ declined to pass the cut on in full.

"The RBA's not being blind to the cycle they're actually adjusting to the cycle," Tim Toohey, Goldman Sachs' economist, said.

He tipped a May cut.

"It's been a pretty successful adjustment period that they've helped engineer without any help on the fiscal side, and with a currency that's not doing them any favours," he told the AFR.

James McIntyre, an economist at Macquarie who foreshadowed the cut, said the RBA's willingness to move showed confidence in their efforts to tame the housing market.

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Interest Rates

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