02 Aug Five reasons why the RBA cash rate is likely to peak (or should peak) with a 2 in front of it rather than a 3 (or more)
Key Points:
- The RBA has hiked the cash rate by another 0.5% taking it to 1.85% and signalling more hikes ahead.
- We see the cash rate peaking around 2.6% which is at the low end of market and economists’ expectations.
- Market & consensus expectations for rates to rise above 3% are too hawkish as: global supply pressures on inflation appear to be easing; the RBA is already getting traction in terms of slowing demand; inflation expectations are still contained; & many households will experience significant financial stress with rising rates.
