Markets have swiftly priced in a much higher chance (60-70%) of an RBA rate hike next week and several bank economists have followed suit.
It is highly likely this was Deputy Governor Hauser’s plan all along in a seemingly last minute podcast interview and not long before today’s 2pm AEDT blackout kicked in.
We recently outlined our view about near-term monetary policy in Should I stay or should I go, with the key takeaways being:
Over overarching view is that monetary policy in Australia needs to be at least a bit tighter. Based purely on domestic factors and pre-conflict evidence of improving global economic activity, a back-to-back rate hike this month would be entirely defensible and sensible in our view. The current uncertain global backdrop, however, lends itself to waiting until May.
Hauser’s interview certainly tests our conclusion about the timing of the next rate hike.
Hauser’s interview got us thinking about the motivations behind it?
