More on Westpac forecasting an RBA cash rate hike in early 2023

Author: Eamonn Sheridan | Category: Central Banks

Justin had the headlines on this on Friday: We expect the RBA will begin it's tightening cycle in Q1 of 2023

  • By then, we expect that the conditions for that first rate increase around full employment and inflation will have been met while wages growth will be close to 3%.
You'll recall that the Reserve Bank of Australia have been repeating (over and over) that they expect the conditions for a first rate hike will not be met until 2024 at the earliest. 

WPAC say Thursday's job report was significant: 
  • a major 'game changer' for policy
  • underscores the strength of momentum in the economy
  • endorses the range of other measures pointing to a very strong labour market
  • The recovery is now clearly into a self-sustaining upswing and the need for emergency stimulus policies has eased significantly
WPAC projections for a rate hike cycle:
  • an increase of 15 basis points in Q123
  • to be followed by 25 basis points in Q223
  • and 25 basis points in Q423
  • That would restore the cash rate to 75 basis points by end 2023, in effect reversing the 'emergency' rate cuts seen in 2020
As a ps. ANZ shifted their forecast for an RBA rate hike to 2023 also, even earlier last week:
And, after the jobs report ANZ is considering moving their rate hike projection even sooner:
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RBA boss Lowe:
Justin had the headlines on this on Friday: We expect the RBA will begin it's tightening cycle in Q1 of 2023

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