In an update that will bring relief to homeowners, National Australia Bank is predicting a slew of interest rate cuts over the next few months.
The big four bank’s chief economist, Sally Auld, signalled cuts worth 100 basis points in total by August, and more to come by the end of the year.
That would see the official cash rate reduced from its current 4.10 per cent to 3.10 per cent in mid-August and 2.85 at the end of the year, before reaching 2.60 per cent in February 2026.
However, NAB said such moves require “the RBA to shift its thinking on a couple of fronts”.
“First, an acknowledgement that risks to inflation are no longer balanced, but rather, biased to the downside as a consequence of trade diversion and weaker global growth,” it said.
“Second, a shift in mindset towards a less cautious approach to their policy strategy; that is, a willingness to act quickly and boldly.”
NAB said the election result, which saw Labor stay in power in a landslide victory, provides markets with “more certainty and predictability”.
“A shock of the nature and magnitude that shifts in US trade policy have imposed is unprecedented in the working lives of most people, let alone economists or others who indulge in the forecasting process,” it said.
NAB also predicted last month that rate cuts were on the way.
