RBA Looks to Be Almost Done With Its Hiking Cycle
- Cash rate futures price half a point more of hikes by May 2023
- RBA stance on falling housing prices, softer CPI could be key
The Reserve Bank of Australia is likely to go ahead with another 25 basis-point interest-rate hike today, raising the benchmark to 3.10%. That’s already a slower pace than its peers, and markets are even pricing a 20% or so chance that it either lifts borrowing costs 15 basis points to a nice round 3% or pulls a real shock by holding policy. The statement from the RBA on whether the central bank is fully ready for more pauses ahead will be key.
Whatever the RBA does — and it has already surprised markets three times out of 10 meetings this year — traders are confident the end is nigh for this tightening cycle. Assuming a 25 basis point move does happen, there’s about 25 basis points more seen after the meeting by May 2023, and then another one by October to round things out.