All of Australia’s big four banks are now forecasting interest rates to start rising in June after the Reserve Bank of Australia’s hawkish pivot on Tuesday.
The big four banks now predict interest rates will start rising in June after the Reserve Bank of Australia’s hawkish pivot at Tuesday’s board meeting prompted Westpac and NAB to revise their forecasts.
as Wall Street’s sell-off spilled over into the Asia Pacific markets. The local 10-year bond yield jumped to nearly 3 per cent. Seven economists on Wednesday brought forward their forecasts after reading RBA governor Philip Lowe’s April-meeting statement, which flagged upcoming inflation and income data as likely triggers for rate rises.Most forecasters believe the first rise will take the 0.1 per cent cash rate to 0.25 per cent, but MLC and Judo Bank both expect a double hike, which would take the rate to 0.5 per cent in just nine weeks’ time.
That is well ahead of the RBA’s forecasts, which are due to be updated on May 6, and those contained in last week’s federal budget; the latter of which tipped a jobless rate of 3.75 per cent out to the end of 2023-24. The tone of Dr Lowe’s statement was upbeat, citing unemployment at a 14-year low and set to fall to a 48-year low below 4 per cent, job vacancies at a record high, and strong commodity prices boosting national income.It also noted that, while wages growth in aggregate had only returned to pre-pandemic levels, there were “some areas where larger wage increases are occurring” and a further pick-up in wages and labour costs was expected.
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