Money markets are now pointing to a peak cash rate of 3%, well down on the 4.5% peak being tipped just two months ago.
The pullback follows signals from the US Federal Reserve, that it could ?pause? interest rates in future months as the US economy teeters on the brink of a recession.
The Commonwealth Bank is tipping a cut in the cash rate from a peak of 2.6% starting in late 2023, and Westpac and Anz expect a terminal rate above 3% with cuts by mid-2024.
The RBA meets tomorrow for its August rate meeting.