Stephen Koukoulas has given us his May interest rate call--a whopping, super-duper, double rate cut (like the RBA, I will wait until I see the inflation data):
"As the RBA undertakes some self-assessment of its recent record, it would acknowledge that it has misread the economy...The May RBA Board meeting will mull over a 25 or 50 basis point rate cut. A cut of 25 basis points would be only a baby step to support growth and keep inflation in the groove when a giant leap is needed. It seems that whatever the RBA does, the banks will keep some of the move to maintain profitability. If the RBA cuts only 25 and say 10 or 15 basis points are passed onto to borrowers, the net move in retail interest rates since December would be zero – despite the undoubted and material deterioration in the economy and market conditions. This is not good enough...Which leads me to think that this time, at the 1 May Board meeting, it will cut by 50 basis points to move retail rates to a slightly accommodative stance. Going 25 is too small given the poor economic data and the downside risks ahead."
