Westpac had been forecasting a first Reserve Bank of Australia rate hike in August of 2022 but have pulled that call forward now to June 2022.

This is in response to the pivot to more hawkish in the statement from RBA Governor Lowe on Tuesday this week.

This change of call from WPAC is hardly surprising. WPAC had expressed surprise at the shift from Lowe in their response to the statement earlier this week. WPAC join other analysts calling for a June hike.

  • Reflecting the changed policy stance from the RBA we now expect a sequence of rate hikes reaching 1.25% by year end.
  • Hikes will resume in 2023 as wages growth & very tight labour market signal the need for higher rates.

WPAC forecasts for the balance of this year:

  • +0.15% in June
  • then +0.25% in July, August, October and November

Then 25bp hikes in 2023 in February, May and June.

The next meetings coming up from the RBA are on:

  • May 3
  • June 7