Traders are ascribing a 50 per cent chance the Reserve Bank will lift the cash rate as early as August to stamp out inflation.
Hot inflation in Australia could force the Reserve Bank to lift the cash rate by August, putting it at the forefront of the global monetary cycle, as a growth headache for the United States economy means the Federal Reserve is likely to defer easing plans until later this year.
In just three days, bond markets violently swung from a 70 per cent chance of an RBA rate cut to a 52 per cent chance the cash rate will climb to 4.6 per cent by August.’s 2023 ranking of economists, predicts the RBA will raise the cash rate three times this year to 5.1 per cent, starting in August. For New Zealand, Europe, the UK, and Canada, the market ascribes between 1 basis point and 16 basis points of rate cuts at their next policy meetings.
He said there were not enough restrictions in the current policy settings to stop inflation re-accelerating.
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