The RBA says it won't be hiking the cash rate for three years. As if.

Author: Eamonn Sheridan | Category: Central Banks

I have been rather scornful of the Reserve Bank of Australia saying it will not hike the cash rate until 2024.

RBA forecasts have been poor and taking a three-year view like this smacks of arrogance.  Markets are pricing in about a one-in-three probability of a cash rate hike by the middle of 2022. 

Says TD Securities:
  • "It's entirely reasonable for markets to start pricing in some risk of the RBA hiking rates
  • Markets are going to price in increasingly higher odds of the RBA having to pull the trigger before their three years are up."
Positives include:
  • more stimulus from the new US Biden administration
  • vaccine rollouts
  • commodity price gains

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