Borrowers can be reassured interest rates are likely to remain on hold for now, but with the inflation dragon still rampant, they should not expect the Reserve Bank to come to their rescue any time soon.
During economic slowdowns, the central bank has often been the "knight in shining armour" for households, cutting interest rates when times are tough to give the economy a boost, HSBC chief economist Paul Bloxham said.
A sluggish GDP print for the March quarter and rising unemployment suggest Australia is already in a downswing.
But while he predicted no more hikes from the Reserve Bank this cycle, mortgage holders were unlikely to receive any rate relief until at least 2027, Mr Bloxham said.
The board should take a lesson from 2025, when it cut interest rates three times as inflation was still coming down, and not turn its back on the inflation dragon until it is sufficiently tamed, he said.
