RBA Set to Hike Cash Rate in September as TD Securities Sees Clear Case for Tightening

TD Securities' Macro Research team expects the Reserve Bank of Australia (RBA) to raise the cash rate by 25bps to 4.60% at its September meeting.

This decision is driven by upside surprises in CPI, firmer GDP, oil prices, and AI-related demand.

The team led by Prashant Newnaha and Howard Du sees the case for a hike as clear and believes that the prior three hikes' impact has yet to flow through.

They forecast no further RBA hikes in November or December, citing pre-emptive tightening as inflation risk management.

The team also expects the Bank to reinforce the possibility of another tightening, but does not see a pressing case for a follow-up hike at its November or December meetings.