📝 Expect RBA to Cut Rates By 2H 2023: CBA

With the RBA now expected to take the cash rate to a contractionary setting, we have penciled in rate cuts for the second half of 2023. Expect the RBA to reduce the Cash Rate by 50bps during the second half of next year. The RBA looks very intent on dropping the inflation rate quickly, but this will come at the expense of growth in aggregate demand, particularly household consumption. Expect headline inflation to peak at 6.25% over 2022 and then decline to within the 2‑3% target by late 2023. See unemployment moving up to 4.5% over, expect home prices to fall by about 15% by end of next year. - CBA Economist