Rob Talevski, CEO of WeBull Securities Australia, has tempered the growing expectation the RBA will cut rates at the upcoming February meeting.
"A lot of people are calling [cuts] for February; I don't think we'll see it," he told the Savings Tip Jar podcast.
"I think we won't see the RBA...make a move until May, and I think a lot of people are discounting certain things."
As of 27 January, the ASX rate tracker estimated the chances of a 0.25% cut at the February meeting to be 84%.
Markets are increasingly confident the RBA will be convinced inflation is on the way down sustainably enough to cut rates to 4.10%.
However, Mr Talevski says the labour market, which remains very strong, is at odds with rates coming down.
"You've got a lot of people employed, there's spending and that can keep [inflationary] pressure up," he told the podcast.
CPI inflation: What to look for
Many home loan holders anxious for their mortgage repayments to finally go down will be hoping for positive news in the December quarter's inflation numbers.
To be released on Wednesday, the data for the last three months of 2024 will likely be among the most important considerations at the February meeting.
The RBA will be looking to see further evidence inflation is moving sustainably towards target levels.
Over the 12 months to September last year, prices rose on average 2.8%.
That was a significant drop from the June quarter, when annual inflation was 3.8%.
Trimmed mean inflation, which excludes the price of volatile goods like fuel, was at 3.4% in September, still well above the target range (2-3%).
In the most recent Statement on Monetary Policy, inflation is forecast to return to the midpoint of this target range in 2026.
The SOMP predicted headline inflation to drop to 2.6% by December with trimmed mean inflation to remain 3.4%.
These forecasts assumed the cash rate will be cut to 3.7% by the end of 2025, although that doesn't mean that's necessarily the RBA's plan.
Market expectations are currently for headline inflation over the year to December to be 2.6%, with underlying inflation 3.3%.
NAB economist Taylor Nugent says the underlying inflation progress looks to be outpacing the "cautious" November forecast.
"[This] gives the RBA the justification needed if they are inclined to cut," he said.
NAB economists are officially still predicting the first rate cut to happen in May, but Mr Nugent says both the February and April decisions are live.
Q4 CPI forecasts
This is what economists from the big four banks are predicting for the December inflation figures:
| Bank | Quarterly inflation prediction | Annual inflation prediction | Underlying quarterly inflation prediction | Underlying annual inflation prediction |
| CBA | 0.2% | 2.4% | 0.5% | 3.2% |
| Westpac | 0.3% | 2.5% | 0.6% | 3.3% |
| NAB | 0.2% | 2.4% | 0.5% | 3.2% |
| ANZ | 0.1% | 2.4% | 0.5% | 3.2% |
Picture by Markus Winkler on Unsplash
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