RBA set for second big rate hike, what does it mean for us?
The Reserve Bank of Australia (RBA) is overwhelmingly expected to raise interest rates by half a percentage point this afternoon.
Why? Because it desperately tries to ease Australia's cost of living pressures.
The nation's headline inflation rate jumped to 5.1 per cent in the March quarter (its highest level in 21 years), and is expected to surge to 7 per cent by December.
According to market pricing, the most likely outcome today is a double-sized rate hike of 0.5 percentage points — which would take the RBA's cash rate target to 1.35%.
Why? Because it desperately tries to ease Australia's cost of living pressures.
The nation's headline inflation rate jumped to 5.1 per cent in the March quarter (its highest level in 21 years), and is expected to surge to 7 per cent by December.
According to market pricing, the most likely outcome today is a double-sized rate hike of 0.5 percentage points — which would take the RBA's cash rate target to 1.35%.
Here are what the "big four" banks are expecting:
$National Australia Bank Ltd(NAB.AU$: "We expect a 50bp hike to 1.35 per cent and for the post-meeting statement to continue to guide for further rate hikes at future meetings."
$CommBank(CBA.AU$: "We expect the Reserve Bank of Australia to increase the cash rate by 50 basis points in July, which would take the cash rate target to 1.35 per cent. The Governor will likely refer to the increase in the 2022/23 minimum wage of 5.2 per cent and the RBA's recent upward revision to their assessment of the near term inflation outlook as justification for a consecutive 50 basis point rate increase."
$Westpac Banking Corp(WBC.AU$: "Given the enormity of the inflation challenge, both Westpac and the market expect the RBA to deliver a back-to-back 50 basis point hikes at their July meeting, bringing the cash rate to 1.35 per cent."
ANZ: "We see the RBA tightening by 50 basis points, taking the cash rate target to 1.35 per cent. We look for the RBA to repeat June's comment that 'the Board expects to take further steps in the process of normalising monetary conditions'. ”
What does it mean for us?
Unfortunately, it's not great news in the short term. As well as paying more to borrow money, prices for most goods rising significantly faster than wages.
Moors, do you have problems facing rising cost of living? Share your story with me!
$National Australia Bank Ltd(NAB.AU$: "We expect a 50bp hike to 1.35 per cent and for the post-meeting statement to continue to guide for further rate hikes at future meetings."
$CommBank(CBA.AU$: "We expect the Reserve Bank of Australia to increase the cash rate by 50 basis points in July, which would take the cash rate target to 1.35 per cent. The Governor will likely refer to the increase in the 2022/23 minimum wage of 5.2 per cent and the RBA's recent upward revision to their assessment of the near term inflation outlook as justification for a consecutive 50 basis point rate increase."
$Westpac Banking Corp(WBC.AU$: "Given the enormity of the inflation challenge, both Westpac and the market expect the RBA to deliver a back-to-back 50 basis point hikes at their July meeting, bringing the cash rate to 1.35 per cent."
ANZ: "We see the RBA tightening by 50 basis points, taking the cash rate target to 1.35 per cent. We look for the RBA to repeat June's comment that 'the Board expects to take further steps in the process of normalising monetary conditions'. ”
What does it mean for us?
Unfortunately, it's not great news in the short term. As well as paying more to borrow money, prices for most goods rising significantly faster than wages.
Moors, do you have problems facing rising cost of living? Share your story with me!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
