Goldman Sachs: It is expected that the Reserve Bank of Australia will cut interest rates by 25 basis points in July, reducing the terminal rate to 3.10%.

Goldman Sachs maintains its forecast that the Reserve Bank of Australia will cut the cash rate by 25 basis points to 3.60% at its July meeting, a prediction that is already fully priced in by the market. Goldman Sachs believes that the RBA will cut rates again in August, followed by one last cut in November, bringing the terminal rate to 3.10%. Given weak GDP data and ongoing slowdown in private demand, risks tend towards a deeper easing cycle. Regarding the policy statement, Goldman Sachs expects that the final portion of the statement may not see much change, still emphasizing inflation targets and policy "constraints." The phrase "severe downside scenario" may be removed, as there have been no updates to the monetary policy forecast statement. It is anticipated that the tone on private demand will gradually become more moderate, although the labor market is still described as "tight."