AMP Capital Economist Says RBA Doesn't Need to Follow Fed Rate Cuts

Diana Mousina, Deputy Chief Economist at AMP Capital, stated that the Reserve Bank of Australia (RBA) doesn't need to follow the US Federal Reserve in cutting interest rates.

Mousina pointed out that there have been instances where central banks have moved in opposite directions, such as after the global financial crisis when the RBA raised rates while the Fed kept rates steady, or in 2015 when the Fed raised rates but the RBA held its ground. She added that central banks need to tailor their policies to domestic conditions.

AMP expects the RBA to begin cutting rates in February 2025, when inflation data is anticipated to further moderate, allowing the RBA to feel confident in easing monetary policy.