Goldman Sachs said the lift to household incomes as a result of the budget (released Tuesday in Australia) is incrementally hawkish:
- forecasts another Reserve Bank of Australia rate hike in July and warns there are further to come after that
- “At a time when the RBA is lifting rates to contain elevated inflation and accelerating labour costs, we assess the budget’s near-term boost to household incomes to have an incrementally hawkish read-through for monetary policy,”
- “Especially given surging migration-led population growth and the recent strong rebound in house prices, we see a firming case for further policy tightening by the RBA over the coming months.”
The next RBA meeting is June 6, Governor Lowe speaks the next day.