Something a bit more realistic. --------------------------------------------------------- Macquarie Group interest rate strategist Rory Robertson said the Reserve Bank of Australia (RBA) would cut the cash rate, now at 6%, to 4.25% over the next year as global financial market turmoil put the economy under pressure.
That would be equal to where the cash rate was in December 2001 in the aftermath of the September 11 terrorist attacks in the US.
Interest rates have not fallen below that level since the RBA began publishing a target interest rate in January 1990.
Debt futures markets are expecting two bigger than usual interest rate cuts by Christmas.
They expect the RBA to cut interest rates by 75 basis points in November and follow up with another three-quarter of a percentage point move in December.
