Finance
Shock to ‘force’ RBA to cut interest rates further than expected: ‘More aggressive’
The Reserve Bank of Australia (RBA) could be pushed to take a “more aggressive” rate-cutting approach following the conflict in the Middle East and the potential oil price shock. Some analysts now expect the central bank could cut interest rates a further three times this year.
KPMG has estimated the conflict in the Middle East could shave between 0.15 and 0.20 per cent of the GDP from the Australian economy this year, should the world oil market react in a similar way to how it responded to the first Iraq War. It said an “oil shock” combined with the continuing threat of a global tariff fallout could “force” the RBA’s hand.
“The longer an oil price shock is sustained, the worse its impact is in terms of inflation outcomes, inflation expectations and short-term growth,” KPMG said.
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“This is because oil price shocks can be particularly damaging to an economy like Australia’s as the road transport sector — one of the heaviest users of oil in our economy — touches every single other sector (including itself) across the country.”
Global oil prices slid 7.2 per cent on Monday following Iran’s retaliatory missile strike on a US airbase. The Brent crude price fell to around $US70 a barrel. This has eased fears of major supply disruptions, but markets remain cautious as tensions continue.
KPMG said it had revised down its RBA cash rate forecasts and now expects a further three rate cuts this year, one more than its original expectation at the start of 2025, bringing the cash rate down to 3.1 per cent by the end of the year.
It expects the RBA to “look through” any short-term inflationary impact of any oil shock and noted this would be combined with core inflation now looking well entrenched in the target band and overall weakness in the Australian economy.
If the RBA cuts interest rates three times, homeowners could see their repayments drop by $265 a month. That’s based on someone with an average $600,000 loan with 25 years remaining.
Markets have an 86 per cent expectation of an interest rate change at the next RBA meeting in July and are almost fully priced in for three more reductions by the end of the year.
NAB is the only Big Four bank predicting an interest rate cut next month, with ANZ, Commonwealth Bank and Westpac expecting a cut in August.
Westpac chief economist Luci Ellis said the RBA would be more focused on inflation than the oil price.
Finance
Chief financial officer to retire after 25 years working at Yale
Stephen Murphy ’87, who has worked in the Yale administration since 2001 and as the University’s chief financial officer and vice president for finance since 2015, will retire from his position in June.
Leo Nyberg & Isobel McClure
Staff Reporters
Yale News
Stephen Murphy ’87, the University’s chief financial officer and vice president for finance who has held the post for more than 10 years, will retire in June, University President Maurie McInnis and Senior Vice President for Operations Geoff Chatas announced in a statement on Monday.
Murphy’s impending retirement comes amid administrators’ efforts to tighten budgets across the University — which could include shrinking the University’s workforce through layoffs — as Yale braces for the tax on its endowment investment income to increase from 1.4 to 8 percent in July.
“It’s been an honor and a privilege to work alongside so many thoughtful, talented, kind, and principled people who are trying each day to make the world a better place through research, teaching, preservation, and practice,” Murphy wrote in an email to the News. “I have loved my time serving as CFO for Yale University. It’s the best job at Yale and the best job in higher education, at least for me.”
Murphy graduated from Yale College in 1987 with a bachelor’s degree in economics. He noted that as a student unable to afford college without financial aid, he was “grateful to have had the opportunity to work toward making undergraduate and graduate education more affordable to more families” later in his career as Yale’s chief financial officer.
In their statement, McInnis and Chatas praised Murphy for his role implementing reforms which they said “lay much of the foundation” for Yale’s financial management.
“During his tenure at Yale, Steve has provided both steady and dynamic leadership of the university’s finances. He has worked with multiple generations of administrators to advance our academic mission through financial strategy, insight, services, and advice,” the university leaders’ joint statement said.
“With tremendous care, Steve has helped steer the university through many challenging moments and provided important guidance to me in my role as provost,” Provost Scott Strobel wrote in an email to the News, noting that Murphy’s work “will benefit students, faculty, and staff for years after his retirement.”
Murphy began working at Yale in 2001 as the Yale Office of Cooperative Research’s director of finance and administration, according to his profile on a University webpage.
Finance
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Finance
Cheers Financial Taps into AI to Build Credit – Los Angeles Business Journal
A credit-building tool fintech founder Ken Lian built out of personal need just got an artificial intelligence-powered upgrade.
Lian and co-founders Zhen Wang and Qingyi Li recently launched Cheers Financial – a startup run out of Pasadena-based Idealab Inc. which combines fast-tracked credit-building with “immigrant-friendly” onboarding.
“Our mission is really to try to make credit fair to individuals who want to have financial freedom in the U.S.,” Lian said.
After coming to the U.S. as an international student from China in 2008, Lian said he struggled for four years to get a bank’s approval for a credit card. Since 2021, the USC alumnus’ fintech ventures have aimed to break down the hurdles immigrants like him often face in accessing and building credit.
Since its launch in November, Cheers Financial has seen “healthy growth,” Lian said, with thousands using its secured personal loan product to build credit through automated monthly payments. At the end of the 24-month loan period, users get their principal back minus about 12.2% interest.
“The product is designed to automate the entire flow, so users basically can set and forget it,” Lian said.
Cheers, partnering with Minnesota-based Sunrise Banks, boasts an average 21-point increase in credit scores within a couple of months among its users coming in with “fair” scores from the high 500s to mid-600s.
With help from AI data summary and matching, the company reports to the three major credit bureaus every 15 days – two times as frequent as popular credit-building app Kikoff. Lian hopes to shave that down to seven days.
Cheers is far from Lian, Wang and Li’s first step into alternative financial tools. An earlier venture launched in 2021, Cheese Inc., served a similar goal as an online platform providing credit-building loans alongside other services, including a zero-fee debit card with cash back.
Cheese folded when the company it used as its middle layer, Synapse Financial Technologies, collapsed in April 2024 and locked thousands of users out of their savings.
For Lian and other fintech founders, Synapse’s fall was a wake-up call to the gaps and risks of digital banking’s status quo. As he geared up for Cheers, Lian knew in-house models and a direct company-to-bank relationship were key.
“That allows us to build a very secure and stable platform for our users,” Lian said.
Despite cooling investment in fintech, Cheers nabbed backing from San Francisco-based Better Tomorrow Ventures’ $140 million fintech fund. Automating base-level processes with AI has given the company a chance to operate at a lower cost, Lian said.
“You don’t need to build everything from the ground up,” Lian said. “You can let AI build the basic part, and then you optimize from that.”
Strong demand from high-quality users who spread the word to friends and relatives has helped, too. Some have even started Cheers accounts before arriving in the U.S., Lian said, to get a head start on building credit.
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