UBS: A significant rate cut by the Federal Reserve will prompt the Reserve Bank of Australia to ease monetary policy earlier

ChainCatcher news, UBS has brought forward its expectation for the Reserve Bank of Australia's first interest rate cut from May next year to February, stating that the downward effects of the Federal Reserve's consistent rate cuts over the next year will also provide the RBA with room to ease.

UBS Chief Economist George Tharenou stated that Australia's interest rates will remain elevated for a longer period, at least in relation to global trends. Global trends are becoming increasingly dovish. UBS currently expects that the U.S. terminal rate will be lower, with the federal funds rate quickly dropping to a level far below the RBA's official cash rate. He mentioned that these factors mean the RBA may begin to ease monetary policy sooner.