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RBA to Hike Following Worrying Signs about Economy


The RBA seemed to be almost finished with the rate increases, since several indicators of the economy were looking uncertain. The rising unemployment rate was often mentioned. A large number of home loan renewals are scheduled for in the next few months. This could increase pressure on Australian homeowners. Australians could be subject to a significant increase in mortgage costs if interest rates rise or remain high.

The Q4 CPI numbers dropped unexpectedly, indicating an increase in prices. This changed the calculations of the central bank and led to increased expectations for a rate rise at the next meeting. The RBA didn’t have any policy decisions in January, as usual, which means it’s a bit behind compared to all the other major central banks which hiked last week.

What are your expectations?

According to the latest survey, the vast majority of economists expect a 25bps increase in interest rates when the RBA meets Tuesday or Monday depending on where you live. Economists from the same group also predict a quarter-point increase at the RBA’s next meeting. The RBA will announce that in its monetary policy statement.

Interestingly, Australian economists aren’t as certain as the international ones. A survey…

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