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The Path Ahead for Australia's Economy Intersects with Monetary Policy
Going into Q4 2024, several factors differentiate the state of the Australian economy from that of its peers such as Canada, Europe and the U.S. For starters, Australia’s short-term interest rate markets price far fewer rate cuts from the Reserve Bank of Australia (RBA) than other central banks, as priced by their respective interest rate markets. (Figure 1). For example, as of September 25, traders’ pricing of SOFR and ESTR futures suggest the Federal Reserve (Fed) and European Central Bank (ECB) cutting rates by 175 basis points (bps) between now and the summer of 2026 (Figure 2). Moreover, all of these other ... (full story)