It’s Thursday the 1st of May 2025, and interest rates are set to fall after a drop in inflation, home prices rise for the third straight month, and Coles is winning the war against Woolworths. Plus both sides of politics get aggressive two days out from the federal election, and Donald Trump takes aim at old enemies in his 100 day speech.
A rate cut is expected in three weeks after March quarter inflation figures show that annual price rises are now back below three per cent. But economists warned that there might only be two more rate cuts this year, because services inflation remains a worry.
Any cut in interest rates is likely to help the local housing market. Cotality figures released yesterday show that house prices across the country rose for the third straight month in April, with $2,720 added to the median value of a home.
We are in the last days of campaigning. All the big announcements have been made and the leaders of the parties are doing their best not to lose votoes. PM Anthony Albanese appeared at the National Press Club yesterday, and Opposition Leader Peter Dutton appeared at his 15th service station of the campaign.
Coles has boosted supermarket sales to $10.4 billion for the March quarter, as it continues to outperform its arch rival, Woolworths.
Donald Trump has marked 100 days in office by holding the biggest rally since his election, in Michigan, the home to auto-making in the US, and continued his tirades on immigration, his predecessor Joe Biden, and the Federal Reserve chair.
Fear-o-meter
Inflation figures from the ABS yesterday show headline inflation at 2.4pc and underlying inflation at 2.9pc – the first time in four years both have been below three per cent, which is the upper band of the Reserve Bank’s target range.
While there are still risks in the inflation outlook, including services prices rising too quickly, there are plenty of reasons for the Reserve Bank to cut rates when it meets in just under three weeks’ time.
Economic growth is still sluggish. Consumer, and to a lesser extent business, sentiment is poor. And the risks from the Trump trade war are real.
The economy is in pretty good nick – low inflation and strong employment. It just doesn’t feel like it because over the past five years, prices are up 20 per cent, but wages are up only 15 per cent.
A rate cut is likely later this month, but there might not be too many more over the next six months. The economy is not out of the woods yet.
Who's talking today?
"Think about it, we've got annual inflation back down to 2.4%. And just two years ago, it was at 7%. So that's pretty phenomenal. I was actually at the Prime Minister's Press Club address yesterday and noticed that there was not one question about inflation from all those journalists in the room, one hour after the release. So very, very fresh news, and not brought up at all. So I think that says a lot."
Property prices rose for a third straight month in April, with dwelling values up 0.3% to a new record high. Here's how the capital cities and regions are faring:
Sean Aylmer and Adam Lang from the Fear & Greed team are taking part in Royal Far West's Ride For Country Kids - a 380km ride through western NSW. The goal is to raise as much money as possible to improve life options for kids from rural communities.
Neither Sean or Adam are cyclists - so this is well outside their comfort zone (although they do seem to be taking to the lycra a little too keenly).
If you can help raise a few dollars for the Fear & Greed team, it will be gratefully appreciated. You can donate here. And we'll be giving supporters a shout-out on the podcast too!
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