According to a report by the firm released today
They are expecting the RBA to move once in the second half of this year to raise rates by 25 bps and they also expect the central bank to raise rates by 50 bps in 2019.
The report also says that the RBA should remain "quite dovish" compared with other central banks around the globe as inflation and wage growth remains soft. Adding that the RBA "appears comfortable lagging behind other central banks in tightening policy, allowing exchange rate flexibility to serve as a buffer".
They also say that Australia's GDP is expected to gain momentum this year and sees growth holding steady at 2.7% in 2019 - arguing that the positive outlook is a reflection of the impact of "strong terms of trade on income, broadly accommodative financial conditions and buoyant prospects for investment".
The majority of the market isn't really expecting the RBA to move at all this year with most of the expectations set for 1H 2019.
Although RBA assistant governor Kent came out to say that "there's no reason why they should move in 25 bps increments", for me that's a sign that we won't see rate hikes until the RBA is feeling more comfortable with the risks associated to household consumption and inflation.
Moving in 50 bps increments gives them time to wait things out to see if the situation is really improving, and if they do decide to go down that path, that would mean we may have to wait longer for a rate hike - not sooner.
