More relief on the horizon as 0.25% rate cut expected

More Relief on the Horizon as 0.25% Rate Cut Expected

Mark Stevenson, Managing Director at Bell Partners Finance (now Evolve Lending & Finance), was featured in Broker Daily in May 2025 ahead of the RBA’s May board meeting, at which markets were pricing a 96 per cent chance of a 0.25 per cent rate cut that would take the cash rate from 4.1 per cent down to 3.85 per cent — a level not seen since mid-2023.

While some commentators had floated the possibility of a more aggressive 50 basis point cut in response to US President Donald Trump’s global trade war, Mark expected the RBA to take a measured approach. He noted that governor Michele Bullock had overseen only one rate cut since taking office in September 2023, the February 2025 reduction, and had consistently positioned caution as a priority. With US Federal Reserve chair Jerome Powell also resisting further easing due to uncertainty about the economic growth and inflation outlook, Mark’s view was that the RBA would not depart from a quarter-point reduction.

HSBC chief economist Paul Bloxham added context on the broader picture: inflation had returned to the RBA’s target band without a recession or significant job losses, which was the positive story, but productivity had been poor and per capita incomes had been falling, meaning rate cuts alone would not be sufficient to lift living standards. Chief economist Dr Diaswati Mardiasmo noted that major banks had already been lowering mortgage rates ahead of the decision, signalling high market confidence, though she expected the impact on property activity to be gradual rather than a sudden surge, with cautious buyers and high property prices still tempering the market. Judo Bank economists Warren Hogan and Matthew De Pasquale flagged that the February forecasts had pointed to the cash rate remaining above 3.5 per cent for the foreseeable future, and that the guidance in the updated forecasts would give the market a clearer sense of what to expect in the months ahead.

If the improving rate environment has you rethinking your home loan, contact Evolve Lending & Finance to find out what options are available to you.