Commonwealth Bank Adjusts Rate Cut Timeline Amidst Labor Market Trends
Commonwealth Bank Adjusts Rate Cut Timeline Amidst Labor Market Trends
7
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
As financial experts eagerly await the Reserve Bank of Australia's (RBA) upcoming board meeting, the Commonwealth Bank (CBA) has shifted its forecast regarding the advent of the next rate cut.
Contrary to popular anticipation, the bank now predicts the rate cut will be delayed, posing less optimistic news for mortgage holders seeking financial reprieve.
The financial community widely expects the RBA to keep the cash rate stable during this session, a forecast deemed straightforward in light of the recent federal budget. However, CBA's latest insights suggest the easing cycle-initially anticipated to alleviate strained mortgage holders-will be postponed due to prevailing uncertainties surrounding inflation forecasts.
Gareth Aird, CBA's head of Australian economics, indicated that recent labor market data shows little motivation for the RBA to alter its policy direction. According to Aird, the current state of the labor market, characterized by a "loosening" at essential levels, supports a prediction that the RBA will maintain the cash rate unchanged.
"Both trend unemployment and underemployment are experiencing a gradual upward trajectory," Aird stated in the latest CBA Economics update. "Work hours are declining, and job advertisements show a discernible downward trend."
Highlighting these labor market dynamics, Aird elaborated, "Our expectation for a more significant loosening in the labor market, which varies from the RBA’s forecasts, is a principal reason why we foresee the commencement of an easing cycle in late 2024. Yet, given the persistent challenges with underlying inflation and the shrinking period to November, the likelihood of a delayed start to the easing cycle is increasing."
The economic slowdown was further highlighted by the first-quarter GDP data, which grew by a mere 0.1%. Over six months, the annualized GDP growth pace reduced to 0.8%. The RBA's current forecast places the average unemployment rate at 4.0% over the second quarter, consistent with recent predictions.
Aird noted, "Despite the bank’s non-accelerating inflation rate of unemployment estimated at 4.3%, there remains significant uncertainty regarding these projections." Additionally, RBA Governor Michelle Bullock opined that the federal government’s $300 energy bill rebate is unlikely to either significantly mitigate or exacerbate inflation levels.
Aird supported this view, referencing earlier CBA economic predictions that the rebates might subtract two-thirds of a percentage point from the third quarter’s Consumer Price Index (CPI). "While this impact is noteworthy, the RBA is more focused on the core inflation dynamics, which excludes the effects of energy rebates," he remarked.
"Our perspective is that the mechanical reduction in headline inflation for Q3, due to rebates, will potentially lower short-term inflation expectations for households and businesses, helping stabilize wage expectations over 2024 and 2025," Aird added.
The RBA's accompanying statement to its board decision is expected to maintain a neutral stance. Despite the fluctuating dynamics and economic signals, Aird emphasized that predicting the exact timing for the commencement of an easing cycle remains inherently uncertain.
Published:Saturday, 15th Jun 2024 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
In the third quarter of 2025, Australia's property market witnessed a significant shift as investors accounted for two out of every five home loans. Data from the Australian Bureau of Statistics (ABS) revealed that over 57,000 investors borrowed nearly $40 billion during this period, marking a 17.6% increase from the previous quarter. This surge underscores a growing trend of investor dominance in the housing sector. - read more
October 2025 marked a significant milestone for first-time homebuyers in Australia, with loan applications surging by 39.2%. This remarkable increase is largely attributed to the federal government's expansion of the 5% Deposit Scheme, which has made homeownership more accessible to a broader segment of the population. - read more
October 2025 witnessed a significant surge in Australian home prices, with a 1.1% increase-the fastest monthly rise since June 2023. This growth reflects a robust rebound in the housing market, driven by several key factors. - read more
In a significant move to support first-home buyers, the Queensland Government has introduced the Boost to Buy scheme, a shared equity initiative designed to make home ownership more attainable. This program offers an equity contribution of up to 30% for new homes and 25% for existing homes, applicable to properties valued up to $1 million. Eligible households with incomes up to $225,000 can benefit from this scheme, which aims to reduce the deposit gap that often hinders first-time buyers. - read more
The recent expansion of the First Home Guarantee Scheme has led to a notable increase in borrowing among first-home buyers. Data from Loan Market Group indicates that, following the scheme's October expansion, first-time buyers in New South Wales borrowed an average of $750,250 in October, up from $630,200 in the previous quarter-a 19% increase. Similar trends were observed in South Australia, with average loans rising by $105,000. - read more
When purchasing a truck, whether for personal use or business, navigating the financial landscape can be daunting. This is where pre-approval comes into play. But what exactly does pre-approval mean in the context of buying a truck? - read more
Finding the right financing for a commercial vehicle in Australia can be a critical step for businesses and individuals alike. Whether it's for a single van or an entire fleet of trucks, understanding the intricacies of commercial vehicle loans is key to securing a deal that aligns with your financial goals. One factor that stands out in determining your loan terms is the credit score—a numerical representation of your creditworthiness. - read more
Embarking on the journey of acquiring a commercial vehicle is a significant decision for any business. Securing a loan with a low-interest rate is not just a matter of luck; it involves meticulous planning and a thorough understanding of the lending landscape. This opening section sets the scene for our deep dive into navigating the commercial vehicle loan process with an eye toward minimizing costs and maximizing value. - read more
Commercial vehicle loans in Australia are a vital component in the Continuum of the transportation and logistics industry. They provide businesses and individuals with the necessary funds to acquire trucks and other heavy vehicles critical for their operations. Understanding the nuances of these loans is imperative for anyone in the market for a commercial vehicle. - read more
Securing finance for any significant purchase can be a challenge, especially when it comes to acquiring a truck for business purposes. Coupled with a less-than-perfect credit score, this task can seem daunting for many Australians. The ripple effects of financial constraints can impede business operations, affecting the lifeline of commercial ventures that rely on transportation. - read more
Start Here
Get a free truck loan eligibility assessment and compare truck finance and leasing options
without accessing your credit file!!
Knowledgebase
Fixed-Rate Mortgage: A mortgage loan where the interest rate remains the same for the entire term of the loan.
