Reserve Bank of Australia boss Philip Lowe at Bonnie Doon Golf Club ahead of interest rate rise

Philip Lowe has been spotted at a $3,350 a year golf club as millions of Australians wait to see if he will raise interest rates again this month.

The governor of the Reserve Bank of Australia spent a relaxing day on Saturday on the green of Bonnie Doon Golf Club in Pagewood, Sydney’s eastern suburbs.

Membership fees of nearly $10,000 a year would barely make a dent in Dr. Lowe’s overall wealth mean.

The 61-year-old reportedly earns $911,728 a year, lives in a house in Randwick worth at least $4 million and has a net worth of more than $10 million.

Dr. Lowe was spotted pushing his golf cart around the course and visiting a sporting goods store on a leisurely Saturday just days before he was expected to raise interest rates for the tenth time on Tuesday.

The RBA raised interest rates for the ninth time in February, taking them to a 10-year high of 3.35 percent.

Australia’s Big Four banks all expect another 0.25 percentage point increase on Tuesday, which would bring it to 3.6 percent.

Interest rates are expected to be hiked two more times by the RBA in April and May, pushing cash rates to an 11-year high of 4.1 percent.

Westpac chief economist Bill Evans expects the Reserve Bank to start cutting interest rates by the end of March 2024.

Seven cuts would save $643 in monthly payments on an average $600,000 mortgage.

“While we expect the economy to stagnate in the second half of 2023, there will not be enough progress to bring inflation in line with the target of allowing earlier rate cuts before the end of 2023,” he said.

Westpac forecasts that the RBA will cut rates by a quarter of a percentage point by the March quarter of 2024, bringing the cash rate back down to 3.85 percent.

Rates would fall another 25 basis points by the end of June 2024, bringing the spot rate down to 3.6 percent, and a further fall of the same magnitude in September would return rates to where they are today – at 3.35 percent .

That would be followed by a series of cuts bringing rates to 2.35 percent by the September quarter of 2025.

Those seven rate cuts in 2024 and 2025 would simply return the RBA money rate back to where it was in early October 2022.

Inflation rose 7.8 percent last year, the strongest rate since 1990 and well above the RBA’s target of 2 to 3 percent.

Westpac now expects inflation to fall to 4 percent by the end of 2023 and to 3 percent by the end of 2024 “enabling a policy response to a stagnant economy by the first quarter of 2024.”

The Reserve Bank does not expect headline inflation, also known as the consumer price index, to fall to 3 percent until the June quarter of 2025.

The 3.25 percentage point rate hikes in just over nine months marked the most severe pace of monetary policy tightening since the RBA began announcing a target cash rate in January 1990.

A borrower with an average $600,000 mortgage has already seen their monthly repayments increase by 42 percent to $3,284, compared to $2,306, based on a variable rate from the Commonwealth Bank which has risen to 5.17 percent, compared to 2, 29 percent in early May.

Another three rate hikes would add another $283 in monthly payments, bringing them to $3,567, as a CBA variable rate rose to 5.92 percent to reflect an RBA cash rate of 4.1 percent.

But 1.75 percentage points of rate cuts in 2024 and 2025 would bring that down to $2,924, down $643 from the projected peak in rate hikes in May 2023.

This would cause a floating Commonwealth Bank interest rate to fall to 4.17 percent, while the RBA cash rate would fall to 2.35 percent.

The RBA last cut interest rates in November 2020, pushing cash rates to a low of 0.1 percent.

Westpac’s forecast of seven rate cuts would come after twelve consecutive monthly hikes.