The RBA hikes rates by another 0.25% – are we there yet?

AMP’s Dr Shane Oliver discusses the recent cash rate rise and looks to the year ahead in this edition of Oliver’s Insights.

Dr Oliver summarises the key points as follows:

  • The RBA hiked again by 0.25% taking the cash rate to 3.35%. It continues to expect to increase interest rates further.
  • We remain of the view the cash rate is near the top as: rate hikes impact with a lag; inflationary pressures are easing globally and showing signs of easing here too; the sharp rise in household interest payments will weigh on spending; and there is increasing evidence rate hikes are getting traction.
  • But given the RBA’s more hawkish tone we are allowing for one more 0.25% hike in March followed by a pause ahead of the start of rate cuts late this year or early next year.

You can access a copy of this edition of Oliver’s Insights here:

Oliver’s Insights