could be hiked up from as early as June this year, the head economist at Australia's largest bank has forecast.
"The inflation data today means that we pull our call forward for the RBA to commence normalising the cash rate from November 2022 to August 2022. Our forecast today for the trimmed mean to increase by 0.9 per cent a quarter over Q4 21 was consistent with an earlier rate hike than our base case. But we thought on balance it was better to wait to see the data today before changing our RBA call," Mr Aird write in a research note.
The Commonwealth Bank is not alone in thinking rate hikes will come earlier than the RBA's previous forecast of "late 2023 to early 2024".where rates will be lifted from 0.10 per cent to 0.25 per cent.Head of Australian Economics at the Commonwealth Bank Gareth Aird yesterday revised his prediction for when the Reserve Bank of Australia will lift rates from their current historic low level of 0.1 per cent.
"The price data reinforces our view that the fast increase in inflation will force the RBA to raise rates sooner than expected. We see the first rate hike starting in August 2022 with a follow-up rate hike in September with a pause for the rest of the year before another lift in early 2023," said Ms Mousina."This is still very low and monetary conditions will remain loose.
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