For Aussie homeowners is looking more likely than ever, with one of Australia's major banks declaring a May rate cut is a done deal. That's a quote. The sentiment was revealed by Combank's senior economist Stephen Wou, who revealed a drop in interest rates will happen if inflation data falls in line with the Reserve banks expectations for more. Finance expert and founder of fort Lake Asset Management, doctor Christian Baylis joins US Live good morning to you. Is he alone or the other other banks thinking the same? Look?

For Aussie homeowners is looking more likely than ever, with one of Australia's major banks declaring a May rate cut is a done deal. That's a quote. The sentiment was revealed by Combank's senior economist Stephen Wou, who revealed a drop in interest rates will happen if inflation data falls in line with the Reserve banks expectations for more. Finance expert and founder of fort Lake Asset Management, doctor Christian Baylis joins US Live good morning to you. Is he alone or the other other banks thinking the same? Look?

Most of the banks have come into line now. I think what's happened ultimately, the tariff led chaos has ultimately tipped so many economists over the line in terms of expecting a May rate cut. It would have been a close call prior to that. But I think with everything that's going on, with all of the dust that's been thrown in the air, people are starting to believe that the path of least resistance is for the ABA just to cut and effectively underwrite the economy, make sure that all that uncertainty is effectively alleviated with some type of health households.

Most of the banks have come into line now. I think what's happened ultimately, the tariff led chaos has ultimately tipped so many economists over the line in terms of expecting a May rate cut. It would have been a close call prior to that. But I think with everything that's going on, with all of the dust that's been thrown in the air, people are starting to believe that the path of least resistance is for the ABA just to cut and effectively underwrite the economy, make sure that all that uncertainty is effectively alleviated with some type of health households.

So will it be a bigger cut than point two five percent, then.

So will it be a bigger cut than point two five percent, then.

I don't think so. Now I think I think fifty is just going a bit too far. That's a crisis type of cut level. I don't think we're in a crisis just yet. Obviously, there's a lot of uncertainty out there, and I think this is almost like an insurance cut. You don't really need to do it. Obviously, households are struggling with the cost of debt, inflation, these sorts of things. But there is just as much data on the other side of the table that could justify a no cut as opposed to a cut. And keeping in mind, only three point three million households have a mortgage out of the ten million households that there are, so there's going to be a lot of people that ultimately, you know, will not like the actual cut as well. It will hit savings rates and these sorts of things.

I don't think so. Now I think I think fifty is just going a bit too far. That's a crisis type of cut level. I don't think we're in a crisis just yet. Obviously, there's a lot of uncertainty out there, and I think this is almost like an insurance cut. You don't really need to do it. Obviously, households are struggling with the cost of debt, inflation, these sorts of things. But there is just as much data on the other side of the table that could justify a no cut as opposed to a cut. And keeping in mind, only three point three million households have a mortgage out of the ten million households that there are, so there's going to be a lot of people that ultimately, you know, will not like the actual cut as well. It will hit savings rates and these sorts of things.

We forget about them, I mean, you know, I mean we don't, but some people do, don't that because they are living on their savings and they have liked the fact that interest rates have been up.

We forget about them, I mean, you know, I mean we don't, but some people do, don't that because they are living on their savings and they have liked the fact that interest rates have been up.

Yeah, And keeping in mind, savings are very elevator because of the pandemic era response, we had the biggest transfer from the public sector over to the private sector, meaning that the government took on more debt basically plunk that in people's bank accounts. People got more savings as a result of that, and therefore they're much more sensitive to the level of interest rates on savings. Meanwhile, the amount of people with more just didn't really change that much, So we do have a lot more sensitivity on that side of the ledger that people need to keep in mind.

Yeah, And keeping in mind, savings are very elevator because of the pandemic era response, we had the biggest transfer from the public sector over to the private sector, meaning that the government took on more debt basically plunk that in people's bank accounts. People got more savings as a result of that, and therefore they're much more sensitive to the level of interest rates on savings. Meanwhile, the amount of people with more just didn't really change that much, So we do have a lot more sensitivity on that side of the ledger that people need to keep in mind.

Okay, so you're saying a cut in May probably point two five percent, and then what and.

Okay, so you're saying a cut in May probably point two five percent, and then what and.

Then I think we wait for the next CPI. So the CPI comes out next Wednesday on the thirtieth of April. That will be the key data point that feeds into the RBA for the main meeting. But I think as we roll forward, we're going to need another three months of CPI data just to see how all of the tariff led uncertney actually feeds into the CPI, because the one thing none of us really know at the moment is that how do tariffs ultimately affect global infation and then how do they affect global growth. Most people are saying all of the chaos is leading into a higher probability of a global recession. But we have to wait and see, you know, basically, see how the rubber hits the road with all of this, because a lot of it is still up in the air.

Then I think we wait for the next CPI. So the CPI comes out next Wednesday on the thirtieth of April. That will be the key data point that feeds into the RBA for the main meeting. But I think as we roll forward, we're going to need another three months of CPI data just to see how all of the tariff led uncertney actually feeds into the CPI, because the one thing none of us really know at the moment is that how do tariffs ultimately affect global infation and then how do they affect global growth. Most people are saying all of the chaos is leading into a higher probability of a global recession. But we have to wait and see, you know, basically, see how the rubber hits the road with all of this, because a lot of it is still up in the air.

Okay, thanks for bring us up to that question. Here's Severe M.

Okay, thanks for bring us up to that question. Here's Severe M.