Nomura: RBA will be forced to cut interest rates in 2024 as recession looms

On February 2, RBA Governor Philip Lowe was trying to balance cooling economic growth with disturbingly high inflation and the risk of an explosion in wages and inflation expectations.

Nomura economist Andrew Ticehurst said high inflation needs to be addressed. But again, the RBA seems very keen to avoid a recession and naturally does not want to be blamed for causing it. This is a very difficult balance to strike.

Further rate hikes and a recession remain at the heart of Nomura’s view on the country to 2023. Ticehurst expects a recession to lead the RBA to cut interest rates in the first half of 2024, as inflation will eventually cool.