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Westpac revised thier forecast for the Reserve Bank of Australia following the smaller than expected 0.25% rate hike on Tuesday this week.
The revisions were soon after the meeting, posting them now ICYMI:
- The Board has clearly signalled the need for further increases in the cash rate over the period ahead, the pace of which will remain at 25bp increments given that policy has now reached a broadly neutral level.
- This will allow the RBA to more closely assess the impacts of the cumulative rate hikes to date as monetary policy continues to lift further into contractionary territory.
- We continue to expect a peak cash rate of 3.60%, to now be achieved with 25bp rate hikes over the next four policy meetings, reaching that level by March 2023 (prev. February 2023).
- Having said that, we believe that the effects of financial tightening will be much greater than the RBA expects.
The remaining RBA meetings for the year are:
The first meeting for 2023 will be on February 7.
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AUD/USD will be buffeted further ahead by Fed rate hikes:
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