Australian Banks Predict Rate Hike as Markets Price in 4.6% Interest Rate

The Reserve Bank of Australia's (RBA) next policy meeting on September 29-30 may see another rate hike, according to forecasts from three major Australian banks. The Commonwealth Bank of Australia and the National Australia Bank both predict a rate rise in November, while the ANZ forecasts a similar move.

NAB argued that the risk is biased towards an additional hike in November if economic activity stays resilient. CBA's head of Australian economics, Belinda Allen, stated that the recent strength across various underlying and domestically influenced prices suggests the pace of disinflation has stalled.

Markets now see a 50% chance that the RBA would hike interest rates to 4.6% in September, up sharply from just 17% before the inflation data. A total tightening of 30 basis points is now priced in by February next year.