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The move could also bring political relief for the government ahead of an election shaping up to be fought on cost of living issues.
Economist Chris Richardson told 9News the fight against inflation was a global one, with the US in the lead.
“Over there they’re starting to think they’ve won the war,” Richardson said.
America’s central bank has indicated it could cut rates three times next year, which has raised hopes Australia may head down the same path.
“It’s increasingly likely that we get rate cuts in Australia within the next year,” Richardson said.
A rate cut before then would ease some of the political pressure on Labor, which went to the last election promising to improve the cost of living.
With the federal government under pressure to find solutions, the opposition also sees it as an opportunity.
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Shadow minister Dan Tehan said the government had “no answers”.
“We see no reason as to why it’s not going to sadly continue to be the case until up to the next election,” he said, of cost of living pressures.
Prime Minister Anthony Albanese released a video today seeking to highlight his government’s achievements but recognising the year had been “especially tough” for some.
“Global inflation has been felt here at home. Families are feeling pressure,” he said.
“As a government, our main focus has been on delivering cost of living relief while taking pressure off inflation.”
But Richardson said the “grind is going to stay mostly in place for most of next year”.
