Westpac Predicting 1% Interest Rate Cut

Westpac Economist Bill Evans has the view of the global and domestic environment there is a good chance of a repeat of this process over the next three months and a much more benign CPI print on October 26. However, notwithstanding our analysis of the flow of inflation data the fact that there has been a second print of 0.9% will make the Board more anxious to take advantage of any window of opportunity. Any rate hike over the next month or so would not change our call that rates will be down by around 100bp’s over the course of 2012. The first cut might be a little longer coming since no central bank wants to need to reverse policy too quickly but the case for a reversal is likely to be well established by year’s end. Bill Evans, Chief Economist


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