The RBA gave a sneak preview of its SoMP forecasts back on Tuesday. Governor Lowe reincarnated in a new hawkish form when
we had the first cash rate hike for over 11 years:
RBA raises cash rate by 25 bps to 0.35%
A cheeky move by the RBA helps to lift the aussie
RBA’s Lowe: Expects that further rate hikes will be necessary in the months ahead
RBA’s Lowe: A more normal level of rates would be 2.50%
Since then we have had some updated analyst forecasts:
Goldman Sachs is forecasting the RBA cash rate at 2.6% by the end of 2022
Westpac forecast a 40bp cash rate hike from the RBA on June 7
Westpac:
The RBA Statement on Monetary Policy will deliver an update to its forecasts and provide more detail surrounding the RBA’s views on the risks to the economic outlook.
NAB:
RBA Statement of Monetary policy will add some welcome context to May forecasts previewed in the post-meeting statement. Recall they saw underlying inflation revised up 2ppt from the February Statement to 4¾ over 2022 and slowing only to 3% to mid 2024 and a further improvement in the path for unemployment.
We will be looking for the RBA’s characterisation of the balance of risks to those forecasts and the outlook.
