INTEREST RATES – THE BOND MARKET’S FORECAST (September 2020)


Back on 20 March 2020 (last RBA interest rate cut) the bond market’s expectations was that the Reserve Bank was to keep interest rates at or below 0.25% for just under 2 years.

As of 30 September 2020, and with the benefit of seen the printing press actions taken by Central Banks over the last six months, the expectation is that the Reserve Bank will keep interest rates at or below 0.25% for just over 3 years. Of course, the mood of the bond market can change at any time.

Perhaps the widely promoted and expected V-shaped economic recovery of “Oh, it’s going to come back”, may turn out to be “It’s not coming back”.

Find out about how the implied forward interest rates are calculated.