A top forecaster issued a dire interest rate warning, predicting that the Reserve Bank will be forced to hike three times before the end of the year.
A top forecaster issued a dire interest rate warning, predicting that the RBA will be forced to hike three times before the end of the year.
“Everything points to the fact that 4.35 per cent isn’t the right level for the cash rate,” the veteran economist told“The RBA’s strategy this cycle doesn’t seem to be working. They were hoping we could do less than the rest of the world because we were more exposed to the nominal channel of monetary policy through variable rate mortgages … We just need to now get up to the level that other countries are, at 5 per cent.
“The complication for Australia is of course homeowners have already seen much bigger rises in their interest rates than their counterparts in other countries, because of the reliance on variable rates,” he said. That would mean the borrower was paying $1436 per month more on their mortgage than they were when the RBA started its rate hikes in April 2022.
Dr Oliver noted that there had been a recent pattern in inflation data where “you get this quarterly surprise and the next one’s on the low side”.
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