Commonwealth Bank of Australia economists with thier take on the speech and Q&A from Reserve Bank of Australia Governor Lowe on Thursday.
ICYMI:
- RBA Gov. Lowe says more rate hikes are coming, but no preset path
- RBA Gov. Lowe: Demand has to grow more slowly to bring back in line with supply
---
CBA summary, main points:
- RBA Governor Lowe yesterday provided a clear hint that the pace of rate hikes could be about to slow.
- The Governor re-iterated his comments from Tuesday’s Statement accompanying the Board decision that there are lags in the operation of monetary policy. But he added today that rates have risen very quickly and the case for a slower pace of increase in interest rates becomes stronger as the level of the cash rate rises.
- We maintain our view that the cash rate will increase by 25bp at the October Board meeting to 2.60%. From there our central scenario now has one further 25bp rate hike in November which would take the cash rate to 2.85%.
- We continue to look for RBA rate cuts in H2 2023 and have 50bps of easing pencilled in.
CBA have been flagging cuts to come for a good months now. That last point they make has their timing estimate.
---
AUD update :
