Melbourne Cup Day rate cut likely

Melbourne Cup Day Rate Cut Likely

Mark Stevenson, Managing Director at Bell Partners Finance (now Evolve Lending & Finance), was featured in Australian Broker News in September 2024 tipping Melbourne Cup Day, November 5, as the most likely date for the Reserve Bank to finally deliver its first rate cut.

Mark noted that the RBA had a notable track record of making rate decisions on the first Tuesday in November. The central bank had raised rates on Cup Day in both 2021 and 2022, and had made one of its most memorable decisions on the same day in 2020, cutting to a historic low of 0.1% during the COVID-19 pandemic. In 2023, it raised 25 basis points on Cup Day to bring the cash rate to 4.35%, where it had remained ever since.

With no RBA meeting scheduled in October, and economic teams from CBA and Westpac both predicting a Cup Day cut if the board held at its September meeting, consensus was building around November as the moment of action. Mark shared that assessment, pointing to easing inflationary pressures as the key driver. Monthly CPI had come in at 3.5% in July, drawing progressively closer to the 2% to 3% target band. The critical September quarter inflation data was due on October 30, just one week before Cup Day, and Mark noted it would play a central role in the board’s decision.

Although the RBA had discussed a hike at its August meeting, Mark’s view was that if the board moved at all, a cut was the far more likely outcome given where inflation was heading. Borrowers waiting for relief had a specific date to watch.

If you are thinking about your home loan ahead of the expected rate shift, contact Evolve Lending & Finance to find out what options are available to you now.