Opinion

Expect a ‘verbal pivot’ from the RBA but no imminent rate cuts

A reduction in the cash rate some time this year is plausible, but there is still some distance to travel before arriving at any imperative decision.

Stephen MillerFormer adviser to Paul Keating

Feb 4, 2024 – 8.27am

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The Reserve Bank of Australia will almost certainly leave the policy rate unchanged when it meets on Tuesday. I’m also expecting a “verbal pivot” from the central bank as it abandons a soft tightening bias in favour of something more neutral or even leaning to the easing side.

Developments since the RBA board last met in December imply that not only is monetary tightening in indefinite abeyance, but that the next move in the cash rate is a cut.

Stephen Miller is an investment strategy advisor to GSFM and formerly a Treasury officer who served on the personal staff of the then-treasurer Paul Keating from 1985 to 1987.