RBA Signals Rate Hike to 4.85% as 90% Market Odds Follow Bullock Warning
Updated
Updated · ABC News · Sep 22
RBA Signals Rate Hike to 4.85% as 90% Market Odds Follow Bullock Warning
3 articles · Updated · ABC News · Sep 22
Summary
All four major banks and most traders now expect the RBA to raise rates at its Sept. 28-29 meeting after Governor Michele Bullock said the labor market remains too tight and is feeding inflation.
Bullock said unemployment likely needs to rise to 4.5%-5% to cool wage and cost pressures, while warning policymakers must stop the global energy shock from triggering broader domestic price increases.
90% futures-implied odds of a September move and roughly even odds of another in November have already pushed mortgage pricing higher, with Commonwealth Bank lifting its two-year fixed home loan rate 0.48 point to 6.82%.
ANZ still sees a November follow-up hike that would take the cash rate to 4.85%, the highest since late 2008, while August unemployment data due Thursday is the last major release before the meeting.
Bullock also said AI could eventually lift productivity and ease inflation, but for now is adding to demand through data-center investment, while stretched valuations remain a financial-stability risk the RBA is monitoring.