RBA Forecasts Hint at End of Interest Rate Hikes

The Reserve Bank of Australia (RBA) has released its latest economic forecasts, which suggest that it may have finished hiking interest rates. The bank's governor, Michele Bullock, said that if the economy continues to track closely with their current forecasts, they will not need further rate rises.

However, Bullock emphasized that this is not a guarantee and that the RBA will still need to see progress before being confident in keeping rates at 4.35% by the end of 2027. She also warned that there may be a need for further interest rate hikes if inflation remains above target.

The RBA's forecasts show that they expect inflation to return to its target range of 2-3% by the end of 2027, even with the current cash rate. But Bullock stressed that this is not a promise and that the bank will continue to monitor the economy and make adjustments as needed.

Bullock also addressed concerns about complacency in the market, saying that it's essential for people to believe that the RBA will act if necessary. She noted that further rate hikes risk pushing unemployment above 5% and tipping the economy into recession.