RBA Poised for Hawkish Pause as Inflation Remains High

The Reserve Bank of Australia (RBA) is expected to keep its cash rate unchanged at 4.35% this week, according to economists and traders.

This decision would be a second consecutive meeting without a rate hike, but the RBA has hinted that it's ready to tighten monetary policy further if necessary.

Economists expect the bank to reiterate its hawkish stance, as inflationary pressures remain strong. The trimmed mean inflation indicator has been above the 2-3% target range since the end of 2021.

Karl Ong, a fixed income research analyst at MFS Investment Management, said that his core expectation is for a 'hawkish pause', but added that a rate hike cannot be entirely ruled out due to persistent price pressures.