RBA Seen Hiking Cash Rate 25bps to 4.60% in September
The Reserve Bank of Australia (RBA) is expected to raise its cash rate by 25 basis points (bps) to 4.60% at its September meeting, according to TD Securities' Macro Research team.
The team, led by Prashant Newnaha and Howard Du, cites upside surprises in the Consumer Price Index (CPI), firmer GDP growth, rising oil prices, and AI-related demand as reasons for the rate hike.
They view the case for a September tightening as clear, but forecast no further RBA hikes in November or December. The team argues that pre-emptive tightening is inflation risk management, and the impact of previous three hikes is still to flow through.
Additionally, TD Securities expects the RBA Governor to reinforce the possibility of tighter policy at future meetings, although they do not see a pressing case for further rate increases.