Australian Dollar: RBA hike expectations shape outlook – ING
ING economists Deepali Bhargava and Lynn Song expect the Reserve Bank of Australia (RBA) to raise rates by 25bp, citing a still-hot economy, tight labour market conditions and upside surprises in Gross Domestic Product (GDP) and inflation.
ING economists anticipate the Reserve Bank of Australia (RBA) will increase interest rates by 25 basis points in their upcoming meeting, citing a robust economy, a tight labor market, and higher-than-expected GDP and inflation growth. Despite some signs of cooling in the housing market, ING economists believe the risks to inflation are predominantly on the upside.
The August Consumer Price Index (CPI) is expected to rise to 4.1% year-on-year, driven by escalating diesel and food prices and persistently high core inflation pressures. Although the housing market is showing signs of deceleration, ING remains vigilant, expecting the RBA to highlight the continued potential for inflation to surpass the target and necessitate further upward adjustments.
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