“To be honest with you, we do have one pencilled in for November,” AMP Capital chief economist Shane Oliver told Investor Daily.
“Our own view is inflation is running well below targets.”
Mr Oliver also spoke on the potential impacts of a rate cut by the US Federal Reserve.
“If the Fed cuts and the RBA holds then it puts upward pressure on the value of the Australian dollar, and that is a clear argument for the RBA to ease,” Mr Oliver said.
David Plank, head of Australian Economics at ANZ, said that while a cut by the Fed could play into the RBA’s decision, the nature of that cut was also important.
“I think the Fed would have to surprise shock to the very doveish side,” said Mr Plank told Investor Daily.
“Not only would they have to cut rates, but they would also have to essentially signal that they’re going to be cutting rates a lot more over the next few months to really have an impact on the RBA’s decision next week.
“We’re expecting the Fed to signal that this is a precautionary rate cut and that there’s not necessarily any near-term follow-up… if that’s what they do, I think that doesn’t put any pressure on the RBA for next Tuesday.”
Mr Plank also said that announcements of CPI on Wednesday and retail sales on Monday would also play a part in the RBA’s upcoming decision, but noted that a drop in unemployment was a boon for the RBA.
Meanwhile, RBA Governor Philip Lowe has indicated that they are prepared to cut rates further and said they had already improved Australia’s economic outlook.
“The board is prepared to ease monetary policy further if needed,” Mr Lowe said in a speech in Canberra on Tuesday.
“Having said that, it is extraordinarily unlikely that we will see negative interest rates in Australia. It is likely though that we will require an extended period of low interest rates to reach full employment and for inflation to be consistent with the target.
“We are confident that these reductions are helping the Australian economy and supporting the gentle turning point in economic growth. In doing so, low interest rates are supporting jobs and overall income growth.”
