01 Feb The RBA ends bond buying – but remains “patient” on rates
Key Points:
- The RBA will end quantitative easing this month.
- While it now sees unemployment falling below 4% and higher inflation it is prepared to be “patient” for now.
- We expect rate hikes to commence in August.
- Ultimately, we see the cash rate rising to around 1.5 to 2% in the years ahead but it’s a bit of guess and the RBA will only raise rates as far as necessary to cool inflation.
- Rate hikes from later this year are unlikely to be enough to threaten the economic recovery but they will add to the slowdown in the property market where we see dwelling prices peaking later this year.