Australia faces potential interest rate hike on Wednesday
Summarised from 2 outlets · Updated 27 Oct, 05:02 · Archive
Australia's central bank may raise interest rates if inflation data released Wednesday comes in higher than expected.
Australian households are being warned of a potential interest rate hike after Wednesday's inflation data release. The RBA's cash rate has already climbed from 3.60 to 4.60 per cent through four increases in six meetings totalling 100 basis points. If rates rise again in November, it would be the fifth hike in seven meetings this year.
The crucial figure is the quarterly trimmed mean inflation rate. Markets expect it to reach 1.0 per cent, which Betashares chief economist David Bassanese says would constitute a 'materially worse' outcome than the RBA's August forecast of 0.8 per cent. Bassanese argues such a result 'should be enough to cement the case for a November interest rate hike', despite the RBA delivering a pre-emptive rate hike in September.
The inflation data arrives as RBA executives give evidence to senate estimates on Wednesday. Traders are watching closely for any reaction from the central bank's leadership. Last week, markets priced just a 27 per cent chance of a November hike before senior RBA officials made public remarks.
How it is being reported
- Australian households face Melbourne Cup day interest rate hike amid persistent inflation threatHouseholds are being warned of further interest rate pain if a critical number released on Wednesday comes in higher than expected.Perth Now · 27 Oct, 04:29
- Australian households face Melbourne Cup day interest rate hike amid persistent inflation threatHouseholds are being warned of further interest rate pain if a critical number released on Wednesday comes in higher than expected.The West Australian · 27 Oct, 04:29
In this story: RBA · Australia · David Bassanese · Andrew Hauser · Betashares
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