According to the Australian, another investment bank has tipped the Reserve Bank will cut interest rates next month. JPMorgan today forecast the central bank will lower rates due to the "material" deterioration in financial markets since the last board meeting.
JPMorgan, which had expected the RBA to hold rates steady next month, today said the debt turmoil in Europe, tight fiscal policy from Australia's government and a strong Australian dollar have changed its mind. The bank's economists expect the RBA to cut rates by 25 basis points to 4.25 per cent next month, inline with forecasts by Goldman Sachs and UBS.The US investment bank also said it expects two more 25 basis point rate cuts in the first quarter of calendar 2012.
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