AI IMPACT: CASH RATE
RBA Cash Rate Target
Baseline:
• The cash rate holds near 4.2% through 2027 while inflation completes its return to target, then eases toward 3.6% and settles. • Cutting begins in the second half of 2027 once trimmed mean inflation is gliding back toward the target midpoint, with the cash rate easing to around 4% by year-end and settling near 3.6% by 2029. • Rates settle at the RBA's estimated neutral level, leaving the baseline without a rate-driven tailwind for asset prices that has occurred during previous easing cycles.
2025 2026F 2027F 2028F 2029F 2030F
S1: Upside - Expansion
3.9% 4.2% 3.9% 3.6% 3.6% 3.6%
S2: Baseline
3.9% 4.2% 4.2% 3.7% 3.6% 3.6%
S3: Downside - AI Bust
3.9% 3.7% 2.5% 2.5% 2.9% 3.1%
S4: Downside - Displacement
3.9% 4.2% 3.2% 2.2% 2.0% 2.0%
Source: Cushman & Wakefield Research
Cushman & Wakefield
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