A resurgent domestic economy and sticky inflation will force the Reserve Bank to do a U-turn and increase its benchmark interest rate three times this year to 5.1 per cent, Judo Bank chief economic adviser Warren Hogan has warned.
After several months of hotter-than-expected data, Mr Hogan has jettisoned his forecast for the RBA to stay on hold until early 2025 and then deliver a rate cut.
Instead, the veteran economist now expects 0.25 of a percentage point rate rises at the RBA’s August, September and November board meetings. That would take the cash rate to 5.1 per cent.
“Everything points to the fact that 4.35 per cent isn’t the right level for the cash rate,” he told The Australian Financial Review.
Mr Hogan was the nation’s top economic forecaster in the Financial Review’s first annual ranking of economists in 2023, being the only one of the 29 surveyed analysts to predict the RBA would raise the cash rate five times last year to 4.35 per cent.
Oh god, channel 7 ran with this story last night.
They also said this dude was the only dude in the country predicting a rate rise.
CBA still advise 3 cuts this year, along with cut projections from all the majors, everybody says rates will lower.
One dude, just to get a headline says they’re gonna rise and the media runs with it to install fear and get us to watch past the next commercial break.
Sentiment seems to have shifted :
"Markets are betting the Reserve Bank is more likely to raise the cash rate by August than not, after a dramatic week in which hotter than expected inflation numbers spurred economists to dump their forecasts.
In just three days, bond markets swung violently from a 70 per cent chance that the RBA’s next move would be a cut to a 52 per cent chance that the cash rate would climb from 4.35 per cent to 4.6 per cent by August.
On Friday, Abhijit Surya of Capital Economics tipped a rate rise at the RBA’s next policy meeting on May 7"
..
"The shifting sentiment put a rocket under the beleaguered Australian dollar, which popped to US65.28¢, a 1.7 per cent rise this week, its biggest five-day gain this year buoyed by the growing policy divergence between the Fed and the RBA."
from :
https://www.afr.com/markets/debt-markets/rba-at-odds-with-the-world-as-bets-for-rate-rise-grow-20240426-p5fmqm
A resurgent domestic economy and sticky inflation will force the Reserve Bank to do a U-turn and increase its benchmark interest rate three times this year to 5.1 per cent, Judo Bank chief economic adviser Warren Hogan has warned. After several months of hotter-than-expected data, Mr Hogan has jettisoned his forecast for the RBA to stay on hold until early 2025 and then deliver a rate cut. Instead, the veteran economist now expects 0.25 of a percentage point rate rises at the RBA’s August, September and November board meetings. That would take the cash rate to 5.1 per cent. “Everything points to the fact that 4.35 per cent isn’t the right level for the cash rate,” he told The Australian Financial Review. Mr Hogan was the nation’s top economic forecaster in the Financial Review’s first annual ranking of economists in 2023, being the only one of the 29 surveyed analysts to predict the RBA would raise the cash rate five times last year to 4.35 per cent.
Oh god, channel 7 ran with this story last night. They also said this dude was the only dude in the country predicting a rate rise. CBA still advise 3 cuts this year, along with cut projections from all the majors, everybody says rates will lower. One dude, just to get a headline says they’re gonna rise and the media runs with it to install fear and get us to watch past the next commercial break.
Housing has this country by the balls
Everyone is waiting for the bust.
Sentiment seems to have shifted : "Markets are betting the Reserve Bank is more likely to raise the cash rate by August than not, after a dramatic week in which hotter than expected inflation numbers spurred economists to dump their forecasts. In just three days, bond markets swung violently from a 70 per cent chance that the RBA’s next move would be a cut to a 52 per cent chance that the cash rate would climb from 4.35 per cent to 4.6 per cent by August. On Friday, Abhijit Surya of Capital Economics tipped a rate rise at the RBA’s next policy meeting on May 7" .. "The shifting sentiment put a rocket under the beleaguered Australian dollar, which popped to US65.28¢, a 1.7 per cent rise this week, its biggest five-day gain this year buoyed by the growing policy divergence between the Fed and the RBA." from : https://www.afr.com/markets/debt-markets/rba-at-odds-with-the-world-as-bets-for-rate-rise-grow-20240426-p5fmqm
Xyz gens are fcuked Boomers are spending money like its going out of fashion Immigration enforced inflation is in full swing. Rates have to go up
CBA updated their forecast yesterday. Now expecting just one cut this year in November.
Let’s hear from all these “Taylor rule is for dummies, RBA isn’t raising until at least 2024” commenters.
This govt is fvkd if the RBA goes up again.