RBA Rate Cut Unlikely Before Q1 2025: Capital Economics

(RTTNews) - The Reserve Bank of Australia is unlikely to cut its interest rates before the first quarter of 2025 as the labor market conditions are still tight relative to full employment, Abhijit Surya, an economist at Capital Economics, said.

Data from the Australian Bureau of Statistics showed that the unemployment rate held steady at 4.1 percent in September. The number of unemployed declined by 9,200 and employment increased 64,100 from the previous month. The participation rate rose to a record high 67.2 percent.

The economist noted that the employment growth is all but guaranteed to overshoot the central bank's year-end forecast of 1.9 percent.

"With the labour market running red hot, the Reserve Bank of Australia won't cut rates before the first half of next year," the economist said.

Given the resilience of the labor market, the economist said he expects 75 basis point worth of cuts across the forthcoming easing cycle.