News
Wealth Pi Fortnightly Economic Snapshot
Interest Rates
The RBA Rate Indicator suggests a 73% probability of a 0.25% interest rate cut at the Reserve Bank of Australia’s next meeting on February 18, 2025, reflecting market expectations based on ASX 30 Day Interbank Cash Rate Futures trading.
RBA
The Reserve Bank of Australia’s November 2024 Monetary Policy Statement highlights a gradual decline in inflation, which remains above target, with the cash rate unchanged at 4.35%, reflecting efforts to balance restrictive monetary conditions against economic growth recovery and wage moderation, while forecasting inflation’s sustainable return to target by late 2026 amid persistent economic uncertainties.
The RBA’s August forecast predicts modest GDP growth recovery in 2025, weak household consumption and dwelling investment until late 2025, a steady unemployment rate around 4.4%, inflation easing towards target by 2026 after peaking at 3.7% in late 2025, and declining wage growth amidst negative terms of trade and cautious economic improvements.
Australian Markets
Household spending in Australia rose by 0.4% in November 2024, driven by Black Friday sales, with significant contributions from recreation and culture (+0.9%), clothing and footwear (+1.8%), and furnishings (+0.8%), while discretionary spending also increased due to strong SUV sales.
Global Markets
US:
Wildfires in Los Angeles County have burned over 36,000 acres, killed 10 people, destroyed 10,000 properties, and displaced 153,000 residents, with major fires in Pacific Palisades, Pasadena, and Woodland Hills causing significant damage and heightening demand for housing amidst ongoing containment efforts.
UK:
UK house prices grew by 1.9% in 2024, supported by a rebound in sales activity, and are expected to rise by 2.5% in 2025, with affordability constraints and regional disparities continuing to influence price growth and buyer behaviour.
Property
Australia’s housing market has entered a downturn, driven by affordability challenges, high interest rates, and slowing economic growth, with declines concentrated in Sydney and Melbourne but expected to remain shallow and short-lived due to tight labour markets, moderate inflation, and housing shortages.
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