More pain for savers as Shane Oliver says he can’t rule out RBA cutting interest rates

More bad news for savers.

Writing on Twitter, AMP’s Shane Oliver has said he sees no interest rate hike until the second half of 2020.

Further, he can’t rule out an interest rate cut.

As expected, the RBA today kept interest rates on hold at just 1.5 per cent, extending its record “on hold” run to 22 consecutive meetings.

The RBA said further progress in reducing unemployment and having inflation return to target is likely to be gradual.

It also said low wage growth is likely to continue for a while yet.

The RBA said one continuing source of uncertainty is the outlook for household consumption, noting household income has been growing slowly and debt levels are high.

Given the economic headwinds, it means the popular bank shares are likely to continue trading in a narrow band for the next 12-18 months.

The first test comes tomorrow, when Commonwealth Bank of Australia (ASX:CBA) reports results. Expectations are for flat earnings growth, flat dividend growth, and a flat outlook statement.

In the meantime, get used to term deposits continuing to pay around 2 per cent for the foreseeable future.

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