RBA to hike by 25bps next week, in November and December – Wells Fargo
|The Reserve Bank of Australia (RBA) will have its monetary policy meeting next week. Analysts at Wells Fargo look for the central bank to hike by 25 basis points at its October meeting and they expect two more 25 bps hikes in November and December.
Key Quotes:
“We expect the central bank to deliver a 25 bps hike, bringing the Cash Rate to 2.60%. In September, the RBA raised its Cash Rate by 50 bps to 2.35% and signaled that further rate hikes would be needed to bring inflation back to target, repeating that policy is not on a pre-set path. In our view, the announcement had a less hawkish tone than prior announcements. The RBA dropped previous wording that rate hikes were a further step in the normalization of monetary conditions, which could indicate that the central bank believes monetary policy is close to neutral, and any further moves could be seen as moving toward restrictive territory.”
“In another less hawkish comment, the RBA said the path for bringing inflation back to target while keeping the economy on an even keel is "narrow" and "clouded in uncertainty." This cautious tone leads us to believe the RBA will move in smaller magnitude rate hikes going forward. More specifically, after a 25 bps hike at its October meeting, we expect two more 25 bps hikes in November and December, bringing the Cash Rate to 3.10%.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.