Via Westpac's note accompanying the release of its data earlier today:
This on the Reserve Bank of Australia:
- The best policy in a tightening cycle is to move quickly in the early stages of the cycle when interest rates are clearly below neutral and the risk of over-tightening is moderate.
- It is also important to signal, as early as possible, to economic agents that the Bank is committed to containing inflation.
Yes for the RBA and also for the Federal Open Market Committee (FOMC) coming up tonight. A 75 bps rate hike from the Federal Reserve is the consensus now after the cascade of revisions to forecasts on Monday and Tuesday:
Back to WPAC On the RBA:
- We saw a 50bp move in June from 0.35% to 0.85% and we expect another 50bp move in July.
- That would see not only the emergency cuts in 2020 being withdrawn but also most of the 75bp of cuts made in 2019, when the Board became frustrated with its inability to lift inflation back to within the 2-3% target band.
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ps. This from earlier, Goldman Sachs revised their call for RBA rate hikes higher:
