Major banks align in tipping RBA rate cut

Major Banks Align in Tipping RBA Rate Cut

Mark Stevenson, Managing Director at Bell Partners Finance (now Evolve Lending & Finance), was featured in The Adviser in August 2025 as Australia’s major banks reached near-unanimous agreement that the RBA would cut the cash rate by 25 basis points at its August 12 meeting, reducing the rate from 3.85 per cent to 3.60 per cent in what would be the third cut of the easing cycle.

The July board meeting had seen the RBA hold by a majority of six to three, with the minutes describing the decision as consistent with a “cautious and gradual” approach to removing monetary restrictiveness. With Q2 inflation data subsequently giving the green light, markets were fully priced for a cut. CBA senior economist Belinda Allen called the decision “straight-forward,” adding that another cut in November was expected and that the chances of an early 2026 cut to 3.10 per cent were building. Westpac was forecasting 100 basis points of total cuts from August through to May 2026, bringing the cash rate to a neutral terminal rate of 2.85 per cent, across meetings in August, November, February and May. ANZ was forecasting a 25 basis point cut this week plus a November follow-up, then an extended hold at 3.35 per cent. NAB was also tipping August, November and February cuts bringing the rate to 3.10 per cent, which it viewed as broadly neutral. Bendigo Bank’s chief economist David Robertson went further, making a “compelling case” for the RBA to cut by more than 25 basis points given a recent jump in unemployment and continued disinflation.

Mark’s own view was that a 50 basis point cut would have been defensible, given that the July meeting had missed an opportunity to move. In his words, the RBA would have been justified in cutting by half a percentage point because they probably should have delivered 25 basis points the month before. Given the RBA’s cautious track record, however, he expected a 25 basis point reduction to be announced, which he described as welcome relief for mortgage holders, with reason to be hopeful for another cut in November.

If you want to understand what the rate cut means for your home loan, contact Evolve Lending & Finance for a review of your current arrangements.