The view that our interest rates will now be staying high for longer is gaining traction, with some economists now seeing the Reserve Bank not beginning to cut the Official Cash Rate till 2025. It was not that long ago some economists were actually talking of the prospect of interest rate cuts this year. "Either way, it looks like we should be prepared for interest rates that are either higher for longer or high for longer. Unexpected resilience in economic data abroad (particularly in the US) is also raising the risk that the Federal Open Market Committee leaves rates high for longer. "If that evidence doesn’t eventuate in time, then it may become a matter of even higher interest rates," Mundy said.

Source: Stuff October 09, 2023 19:59 UTC