Latest news with #economicForecast
Bloomberg
02-07-2025
- Business
- Bloomberg
AfDB Cuts South Africa Growth Outlook by Half on Trade Concerns
South Africa must accelerate structural reforms to offset global challenges that include US President Donald Trump's trade war, the African Development Bank said as it cut the nation's economic forecast. It lowered its forecast for Africa's most-industrialized economy to a meager 0.8% this year from a previous estimate of 1.6%, the Abidjan-based lender said in an update to its Country Focus Report for South Africa.
News.com.au
02-07-2025
- Business
- News.com.au
Banks all sing from same hymn sheet on RBA rate cut
All four major banks are singing from the same hymn sheet and it's likely to be welcome news for homeowners. ANZ has become the final big-four bank to predict a 25 basis point interest-rate cut when the Reserve Bank of Australia meets next Tuesday following disappointing retail figures released earlier on Wednesday. The Australian Bureau of Statistics figures showed Australians spent slightly more in May compared with April, but it was not nearly the boost markets were expecting following a rate cut in May. Retail sales jumped 0.2 per cent in May following a disappointing April when sales fell by 0.1 per cent despite two long weekends in the period. This was compared with market expectations of a 0.5 per cent increase in retail turnover. ANZ head of Australian economics Adam Boyton said sluggish retail spending, stalled consumer confidence and growing uncertainty around US trade policy were key reasons why his bank was predicting an earlier rate cut. 'A 25bp reduction in the cash rate in July is the path of least regret rather than waiting for August and a full forecast update, as has been the RBA's approach to the prior two rate cuts and the November 2023 tightening,' the bank wrote in a report. Betashare chief economist David Bassanese said Wednesday's weaker than expected retail figures 'flashed yellow lights' for the RBA, although he was sticking with a rate cut forecast in August. 'Accordingly, although retail sales rose a weaker than expected 0.2 per cent in May, it does not necessarily give the green light to the RBA to cut interest rates next week,' he said. 'Anecdotal credit card data suggests there's been a solid uplift in retail spending in recent months even though it has not yet been reflected on retail sales.' NAB was the first to forecast a rate cut in July, having been the most bullish on rate relief for homeowners. Back in April, NAB predicted a 50 basis point cut in May followed by 25 basis point cuts in July, August, November and February 2026. The RBA cut rates by 25 basis points in May instead. CBA is also anticipating a rate cut in July as well as further rate relief in August. The call from ANZ follows Westpac chief economist Luci Ellis updating her economic forecast to a 'likely' move in July, although she cautioned that it was not a 'shoo-in'. 'Moving more quickly than the 'cautious and predictable' path flagged in May implies that the RBA's forecasts need to shift,' she said. 'We expect that the inflation evidence will overtake the RBA's thesis of domestic tightness over time. 'But we do not think they are going to start singing from an entirely different song sheet just yet.' Mozo spokeswoman Rachel Wastell said if the major banks were correct in their forecasts of a rate cut on July 8, it could make a big difference for mortgage holders. 'For some households, a 25bps cut could mean real monthly savings, around $76 a month or $918 a year on a $500,000 loan, she said. 'For others, it could be the push they need to refinance or give them the wiggle room they need to be able to meet the serviceability requirements to refinance and get a lower rate.'
Bloomberg
29-06-2025
- Business
- Bloomberg
RBA Should Abandon New 2.5% Inflation Goal, TCorp's Redican Says
Australia's central bank should ditch a new goal of hitting the midpoint of its 2-3% inflation band as the benchmark imposes unrealistic expectations on policymakers, according to Brian Redican, chief economist at sovereign investment manager TCorp. 'The focus on '2.5%' provides a false sense of precision about the ability of monetary policy to deliver a particular inflation rate two years ahead,' Redican said in a note Monday. 'Inflation will be more affected by what happens with oil prices or Donald Trump's trade policies than if the cash rate is 4.1% or 3.85%.'
Forbes
18-06-2025
- Business
- Forbes
The Fed Opts Not To Cut Interest Rates Again—Even As Trump Ups Attacks On Fed Boss Powell
The Federal Reserve indicated Wednesday it won't bend to President Donald Trump's aggressive push for interest rate cuts, though the central bank did reveal how the top U.S. monetary policymakers are approaching the U.S. economy as tariffs play out. Federal Reserve Chair Jerome Powell will take center stage again this week. In his latest attack on the Fed and its top-ranking official Jerome Powell, Trump derided Powell as a 'stupid person' because he 'probably won't cut today.' The Federal Open Market Committee, the 12-person panel that most crucially sets the target federal funds rate baseline for borrowing throughout the U.S. economy, confirmed Wednesday afternoon it opted to keep rates at the 4.25% to 4.5% range they've stood since December. That was widely anticipated by Wall Street — CME Group's FedWatch Tool indicated markets priced in just 0.1% odds of a cut this week – despite Trump's repeated demands for the Fed to slash rates by a full percentage point. Perhaps most crucial in the Fed's update was the release of its quarterly summary of economic projections, or dot plot, revealing where the central bank expects the U.S. economy to head this year. Fed staff upped their median December 2025 forecast for the unemployment and core inflation rates to 4.5% and 3.1%, respectively, both of which would be multiyear highs, and decreased its fourth-quarter real gross domestic product growth forecast from 1.7% to 1.4%. Despite the bearish forecast, there was a glimmer of hope for bullish observers, as the Fed maintained its projection of two 25 basis-point rate cuts this year. Recent economic data seems to satisfy the normal rate cut preconditions of steady inflation and a weakening labor market, but the Fed has been hesitant to take action as it normally may, citing the uncertain impact of Trump's tariffs. To that end, Goldman Sachs economists expect inflation to rise from its most recent 2.5% to 3.3% by December, according to the Fed's preferred inflation measure of core personal consumption expenditures. Goldman expects the dot plot to also reveal the Fed expects to see higher unemployment (four-year high of 4.5%) and lower economic growth (1.3% real gross domestic product growth), though the investment bank does expect the Fed to stand by its projection of two 2025 cuts. Wednesday marked the latest in a long string of attacks on Powell. The monetary policy chief has been among the most frequent targets of Trump's ire during the first five months of his second presidential term. Trump has repeatedly gone after the central banker as the Fed declines to cut rates to Trump's liking. Trump called Powell a 'numbskull' last week, and has frequently teased the possibility of firing Powell before his term expires next May.
Yahoo
17-06-2025
- Business
- Yahoo
Fed kicks off June meeting: Market expects rates to hold steady
The Federal Reserve's June meeting is underway. The central bank will announce its latest interest rate decision, and economists expect the Fed Chair to hold rates steady. Yahoo Finance Senior Fed Reporter Jennifer Schonberger outlines what investors need to know. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Well, this week investors will not only learn the Federal Reserve's latest interest rate decision, they'll also get a look at updates to the Fed's summary of economic projections. And Yahoo Finance's Jennifer Schonberger joins us now with more, Jen. Hello, Josh. The Federal Reserve kicked off their two-day policy meeting earlier today in Washington where they are widely expected to hold interest rates steady at the conclusion of their meeting on Wednesday. But the bigger question is whether Fed officials still see two rate cuts this year. Back in March, let's rewind the clock. Officials retained their outlook for two rate cuts from December. Many think the Fed will maintain two cuts at this meeting as well, for the sheer reason that there's still so much uncertainty around the outlook from the impact of tariffs, tax policy, and immigration on inflation, the job market, and overall growth. For that reason, not much is expected to change when it comes to the Federal Reserve's economic forecast either. As of March, the Fed saw inflation rising 2.8% this year, from 2 and a half percent projected back in December. The unemployment rate was seen ticking up to 4.4%, and GDP was seen slowing down to 1.7% this year, down from 2.1%. Tariffs have whipsawed from extremely high to being honed in to be more moderate, while uncertainty still persists over what the actual tariff rate will be. Economists from Goldman Sachs and JP Morgan see the Fed upping their outlook for inflation, but lowering their outlook for growth. With the latest inflation readings having clocked in milder, even with tariffs on full blast in April and in May, one question for Fed officials is whether they still view the risk that inflation from tariffs could prove longer lasting, or whether it's just too early to judge the impact from tariffs and that perhaps inflation from tariffs hasn't yet been seen. Another question is whether the Fed sees any cracks in the labor market. Investors will be looking for whether the Fed leaves the door open for a rate cut later this summer.
