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Greg Jericho on why it’s time for a rate cut
Feb 16, 2025
Greg Jericho, Chief Economist at the Australia Institute and insightful Guardian columnist, shares his perspectives on Australia's economic landscape. He argues that failing to cut interest rates could have serious political consequences. Jericho highlights the positive economic indicators that suggest rate cuts are overdue, especially given the context of inflation management and government policies. He also discusses how these adjustments could significantly impact renters and families struggling with rising living costs, adding a layer of urgency to the Reserve Bank's upcoming decision.
19:10
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Quick takeaways
- Greg Jericho emphasizes the urgency for the Reserve Bank of Australia to cut interest rates due to improving inflation and economic indicators.
- He argues that a rate cut would alleviate the financial burden on households suffering from high mortgage repayments and cost of living pressures.
Deep dives
Rate Cuts on the Horizon
The Reserve Bank of Australia (RBA) is facing immense pressure to cut interest rates, especially after a long period of increases aimed at combating high inflation. Expectations have risen significantly, with market sentiment indicating a nearly 95% likelihood of a rate cut. Chief Economist Greg Jericho highlights that with recent favorable inflation figures, such as a Consumer Price Index (CPI) drop to 2.4%, the RBA has run out of justifiable reasons to maintain the current rates. As other central banks globally begin to lower rates, the RBA is seen to be lagging, creating a sense of urgency for a monetary policy shift.
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