The vast majority of economists believe that the Reserve Bank of Australia will cut interest rates at its next board meeting, but their stance is not as firm as market pricing suggests.

Among the 32 Australian economists surveyed, 25 expect the Reserve Bank of Australia to lower its cash rate target by 25 basis points on Tuesday, ending a 15 month period of unchanged monetary policy.

Last December's quarterly CPI was lower than expected, leading to potential annual inflation approaching the central bank's target range. In recent weeks, expectations of interest rate cuts have gradually increased.

This is enough to convince Andrew Barker, the research director of the non-profit think tank CEDA.

He said, "The Reserve Bank of Australia's interest rate decisions are forward-looking because the full effect of lowering interest rates takes a year or more to boost economic activity and thus prices. This means that potential inflation above the target is not enough to be a reason to avoid interest rate cuts

Traders expect a 90% chance of a rate cut, but many economists believe it will be much harder to predict than market expectations, with 22% of surveyed economists expecting no change.

Michael Knox, Chief Economist of JPMorgan Chase, Stephen Smith, Partner at Deloitte Access Economics, Sean Langcake, Chief Economist of Oxford Economics Australia, Tim Reardon, Chief Economist of HIA, Brendan Rynne of KPMG, Stella Huangfu, Professor at the University of Sydney, and Warren Hogan, Judo Bank, predict that the Reserve Bank of Australia will maintain interest rates unchanged for the 10th consecutive meeting.

Knox said, "Although the quarterly revised average CPI has dropped to 3.2%, we believe that a 4% unemployment rate is too low to sustainably lower inflation to the central bank's target level of 2.5%

Some economists, such as Richard Holden, a professor at the University of New South Wales, Warwick McKibbin, a former member of the Reserve Board of Australia, and Steven Hamilton from George Washington University, all anticipate a rate cut, but they believe it would be a bad idea.

Professor Hamilton said, "For some time now, market pricing has strongly supported interest rate cuts, and central bank officials have had the opportunity to oppose them, but not. If interest rates are not cut under market pricing, it will be a huge impact

However, I believe that if they really cut interest rates, it will be a complete or almost complete slowdown this year, as the fundamentals (especially the labor market and global outlook) have not provided much additional capacity for them to do so

Therefore, personally, I will not cut interest rates. I would rather wait and see if core inflation continues to decline before cutting interest rates

Professor Hamilton is not the only one who believes that the central bank will maintain a hawkish attitude.

Andrew Ticehurst, a senior economist at Nomura Securities, believes that given rising prices and continued high global uncertainty, the central bank will not continue to cut interest rates in April.

He said, "I expect the message conveyed by the central bank to be cautious and point out that any further policy easing is highly dependent on the progress of future (quarterly rather than monthly) inflation, which is certainly unknown

After the Reserve Bank of Australia announced its interest rate decision and latest monetary policy statement on Tuesday, the Australian Bureau of Statistics will release wage price index data on Wednesday and labor force statistics data on Thursday.

Australian Federal Reserve President Bullock will be questioned by Parliament on his interest rate decision in Canberra on Friday, marking the end of a milestone week in the economic sector.