RBA Expected to Hold Rates Steady Amid Rising Inflation Concerns
The Reserve Bank of Australia's next move on interest rates is on everyone's mind as inflation data and Governor Michele Bullock's speech are highly anticipated. Economists expect no rate hikes despite renewed tensions in the Middle East driving up oil prices.
NAB senior economist Taylor Nugent says his bank doesn't believe another rate rise is likely in 2026, citing growth slowing in the labor market as a reason to hold rates steady. He notes that the inflation data released on Wednesday will capture the calm during the conflict when fuel prices plummeted.
Other major banks agree, with ANZ forecasting trimmed mean inflation of 3.7 percent year on year, slightly below the Reserve Bank's forecast. However, they caution that another hike can't be ruled out in either August or November due to renewed escalation of tensions in the Middle East.