Monday, April 3, 2023

Economists split on whether Reserve Bank will freeze rates as inflation falls

Will they or won't they?

That's the big question as the Reserve Bank considers a possible "pause" in its so-far agggressive interest rate hiking strategy - ten in a row since last May.

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Economists are split on whether we'll get another rate rise when the RBA board meets tomorrow - so no doubt a lot of anticipation given soaring mortgage repayments and widespread bill shock from the higher cost of living.

Economists from the big four banks are split on whether the RBA will slam on the brakes 

ANZ and the National Australia Bank are tipping rates to rise by another quarter of a percentage point while Westpac and the Commonwealth Bank predict a rates will go on hold.

While economists are on a knife edge, money markets are factoring in a 100 percent chance of a rates "pause" after annual inflation dipped to 6.8 percent - tentative evidence that inflation is falling and is heading back towards the RBA's 2 to 3 percent target band.

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