Market bets on RBA rate hike as September inflation pressures build
Traders now price 50% odds of a rate rise after inflation outlook shifts above forecasts.
RBA governor Michele Bullock testifies to Senate on Wednesday as September inflation data drops, exactly the moment traders will watch for her reaction. The trimmed mean is expected to hit 1% for the quarter, above the RBA's August forecast of 0.8%.
Market pricing for a November rate hike jumped above 50% after deputy governor Andrew Hauser said the inflation outlook appeared materially worse last week. The RBA board meets November 3-4.
But NAB economists still forecast the RBA will hold the cash rate at 4.6%, citing weak jobs data and below-trend growth as reasons inflation should return to target.
- 0.8 per cent quarterly
- RBA August forecast
- 1 per cent quarterly
- Expected September result
- Above 50 per cent
- Market rate hike odds
- 4.6 per cent
- Current cash rate
Why it mattersA rate hike would lift borrowing costs for mortgages and business loans when inflation is already squeezing household budgets.
AustraliaAustralian households with mortgages face higher repayments if the RBA raises rates; savers could earn more on deposit accounts.
Corroborated byau.finance.yahoo.com
✓ Claims checked against the source. checked 2 h ago
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