When Q4 inflation was reported at 7.8% and December (month) inflation hit 8.4% a Reserve Bank of Australia rate hike became a no-brainer. The Reserve Bank of Australia have it splashed on the front page of their website:
The meeting is February 7,
- the decision and statement are due at 2.30pm Sydney time, which is 0330 GMT and 10.30 pm US ET
- the RBA CPI inflation band is 2 - 3%
Reuters polling has found that 30 of 31 analysts expect +25bp at this meeting:
- 1 of 31 expects no change.
- 19 of 30, now expecting the cash rate to peak at 3.60% by end-March and stay there for the remainder of the year.
"We think the Bank will need to see clearer evidence that inflation is slowing in earnest before it backs off from rate hikes. That evidence will probably only become clear in the Q1 inflation data, due at the end of April," noted Marcel Thieliant, senior economist at Capital Economics. "The incoming data do not warrant a pause in the RBA's tightening cycle and we expect the Bank to lift the cash rate to 3.85% by April. However, with inflation set to come off the boil, we forecast policy easing before the end of the year."
