No point dithering on rates

The RBA won’t stop at 50 basis points, and it’s entirely possible that we could see a further 75bps cut this year.

PORTFOLIO POINT: The Reserve Bank will make further cuts to the cash rate in 2012, and another 75 basis points seems plausible.

The RBA cut its cash rate target by 50 basis points to 3.75%. Morgan Stanley (and consensus) had expected a 25bp cut. It seems the key to the larger-than-expected cut was the larger-than-expected decline in inflation, reported last week.

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