Confident claims fixed mortgage rates could be set to drop.

This follows the Reserve Bank keeping its official cash rate at 1.75 percent, and it's expecting to stay there through 2020.

Westpac Chief Economist Dominick Stephens told Mike Hosking financial markets are still coming to terms with this approach.

"It hasn't affected short term rates at all but I'm thinking things like the two-year fixed mortgage rate may well drop because at the wholesale end we have already seen a drop at that maturity."

LISTEN ABOVE AS DOMINICK STEPHENS SPEAKS WITH MIKE HOSKING