RBA to hike rates further this year, say economists in snap poll
Australia’s central bank will likely deliver one more 25-basis-point interest rate increase by end-September to 4.10% following a surprise hike on Tuesday, according to a slim majority of economists in a snap Reuters poll.
The Reserve Bank of Australia, which apologized last year for providing unclear guidance, has sent mixed signals in recent months over its inclination to hike rates further or pause, although Governor Philip Lowe said on Tuesday the Bank was “dead serious” about getting inflation under control.
On May 2, the RBA startled economists and financial markets with a hike. The vast majority expected no change, having taken cues from the April meeting when the central bank paused policy amid slowing inflation.
“The month-to-month pivots in RBA communication this year have made it difficult to extrapolate meeting communication – but we have consistently expected that further hikes would be required from the RBA,” wrote Chris Read, Australia economist at Morgan Stanley.
“We keep our forecast for a 4.1% terminal rate. Our expectation is that the final rate hike occurs in August. However, we would flag there are key catalysts that could see this hike come earlier in either the June or July meetings.”
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