RBA to hike by 25 bps next Tuesday but that may be it

Alan Mitchell in the Australian Financial Review has had a good handle recently on what the RBA is likely to do. He agrees with most economists that they will raise by 25 bps next Tuesday but that they may then stop and not raise in December as many expect. That would probably involve a change in language and tone.

There has also been a marked difference in recent months between the RBA view of the economy (storming ahead) and the Treasury view as espoused by Ken Henry (danger still lurks). One more small rise and then a halt might suit both camps.