CBA says only one more RBA rate hike to come, +25bp in December. Cash rate peak 3.1%.

A forecast via Commonwealth Bank of Australia on what is ahead from the Reserve Bank of Australia.

TL;DR version is this:

• We expect one further 25bp rate hike in December which would take the cash rate to 3.10% (our expectation for the peak in the cash rate).

CBA acknowledge a risk to this view:

• The risk sits with a higher terminal rate, but we continue to look for rate cuts in H2 2023 and favour 50bp of in Q4 23.

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Through this RBA rate cycle CBA have been tending towards the dovish side.

More from the note (this in summary)

• The RBA has made an upward revision to their forecast profile for inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term, as expected.
• The RBA now expects annual inflation to peak at 8.0% in Q4 22 and to be 4.7% in Q4 23.
• Underlying inflation is forecast to peak at 6.5%/yr in Q4 22 (which implies an increase of 1.5%/qtr in Q4 22) and to be 3.8%/yr in Q4 23.
• The RBA expects the unemployment rate to be 3.7% by Q4 2023 (we forecast a higher number of 4.3%).
• The RBA’s forecasts for inflation and wages growth indicate that they expect real wages growth to be negative until mid2024.
• The RBA have downwardly revised their GDP profile and expect growth of 2.9%/yr in 2022 and 1.4/yr% in 2023.

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The hike cycle so far from the RBA:

And, FWIW I think CBA is very likely to be wrong on this forecast.