JP Morgan Expects RBA Hike In August

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By Rudi Filapek-Vandyck

JP Morgan economists Jarrod Kerr and Stephen Walters have revised their official interest rate outlook for Australia, now expecting the Reserve Bank of Australia (RBA) to raise rates to 6% in August versus September previously.

The main reason behind the change in view is that headline inflation is seen likely to break through the RBA’s 2-3% target range while core inflation is accelerating.

Commonwealth Bank maintains the view that the RBA doesn’t necessarily have to tighten further, although the bank sees risks to the upside, while HSBC and TD Waterhouse believe there could be another rate hike in the offing for early next year.

The majority of economists in Australia foresee one more rate hike, by 25 basis points, in either August or September.

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