RBA Set to Hike Cash Rate to 4.6% Amid Rising Inflation Fears
The Reserve Bank of Australia (RBA) is widely expected to increase the cash rate to 4.6% on Tuesday, marking its highest benchmark borrowing rate since November 2011.
This move comes as inflation data arrives too late for the RBA board meeting but suggests the bank has already lost patience with getting inflation back to target.
Economists believe that recent hot inflation figures and rising oil prices have accelerated the need for higher interest rates, making it almost certain that the cash rate will rise to 4.6% on Tuesday.
Morgan Stanley's Australia economist Chris Read expects the board to vote unanimously in favor of a hike, marking a shift from its post-COVID approach which allowed a slower return of inflation to target to limit labor market downside.