The recent rate cut of 0.25% gives borrowers a slight reprieve, however we don’t think RBA Governor Michelle Bullock will be fast to move rates down. We expect the RBA to cut again possibly in September 2025. This is of course assuming economic conditions remain constant. A recession, stockmarket crash, or unexpected inflation could all change this, up or down, among other unexpected events.
Investors can benefit by locking in fixed interest rates to safeguard their income against expected interest rate cuts during this period. It also helps with maintaining purchasing power against inflation. The Australian Securities Term Fund (ASTF) is a great alternative for cash compared to high interest-bearing bank accounts, given that typically around 50% of the fund is invested
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