September Rate Hike Looms: Which ASX Shares Will Suffer Most?

The Reserve Bank of Australia's next interest rate decision is due on September 29th. The market debate has shifted from when rates will fall to whether they will rise again.

In its August statement, the RBA made it clear that if inflation misbehaves, the cash rate target may increase further. Since then, data has not helped the case for patience: annual headline inflation eased to 3.5% in July, but the trimmed mean measure came in higher at 3.6%.

Morgan Stanley expects a hike in September, while Westpac chief economist Luci Ellis is less convinced and sees November as the more likely date.

Banks and long-duration assets, like Goodman Group, are particularly vulnerable to rate hikes. A single increase would not break these companies, but it would test their share prices, which have already priced in near perfection.