Economist John Edwards, who previously served on the monetary policymaking board of the Reserve Bank of Australia, said in an interview today that the RBA could raise interest rates four times in a row quickly by the end of 2022.
Edwards, who gets a lot of press when it comes to his views on the RBA, has explained that given the current upward trajectory of the economy, slow, incremental rate hikes could be on the table considering “a one-time increase doesn’t make sense.” If this were the case, this implies a cash rate of 1% by the end of the year.
Edwards warns that cautious RBA language could end quickly.
But nevertheless, the RBA does not expect wage price index growth to reach 3% until mid-2023 and therefore, the market has concluded that there will be no immanent hard line of the central bank.
”We believe that RBA wage outlook too pessimisticwhich is behind our expectation that the RBA to start raising interest rates in second half of 2022,” analysts at ANZ Bank argued recently. Westpac’s view remains that the RBA will raise the cash rate to 0.25% in August and 0.50% in October.
Source: Fx Street
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