According to The Australian Financial Review, the Reserve Bank could slash its key cash rate to as low as 0.5 per cent by this time next year, signalling further pain for savers and depositors but more gains for the sharemarket.
Markets are pricing in two 25 basis point cuts by the end of the year. But a growing number economists now expect the cash rate, which guides lending and deposit rates, could fall to a historic low of 0.5 per cent by next June from today's 1.25 per cent level.
As rate cut expectations grow and iron ore prices remain high, investors are piling into stocks, with the S&P/ASX 200 jumping to a fresh 11-year high last week.
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