Bold start: Two of Australia’s leading lenders are betting that the Reserve Bank will resume rate hikes in February to confront stubborn price pressures in the economy.
Two of Australia’s major banks now anticipate the RBA will raise rates again in February, continuing a trend to curb ongoing inflation.
Commonwealth Bank of Australia has shifted to a forecast of one rate increase next year, bringing the cash rate to about 3.85%. However, economist Belinda Allen cautions there could be a risk of a larger hiking cycle if growth accelerates and inflation proves more persistent than expected.
National Australia Bank Ltd. Chief Economist Sally Auld adds to the forecasts with expectations of two rate increases—one in February and another in May—projecting a terminal policy rate around 4.1%.
In short, the consensus among these top lenders points to a February move higher, with the path thereafter dependent on how strongly the economy decelerates inflation and whether growth momentum softens or persists.
What’s your take? Do you agree that February should bring another rate rise, or do you think conditions call for a pause or a more gradual approach? And what would you consider the most persuasive signal for the RBA to change course in the coming months?
