Australia's Inflation is at its Pinnacle; the RBA will Increase Interest Rates by 50 Basis Points in August, According to ANZ

According to the most recent research report from Australia and New Zealand (ANZ) banking group analysts, the Australian Q2 inflation data did not alter their recommendation that the Reserve Bank of Australia (RBA) raise interest rates by 50 basis po

July 27, 2022 - 11:53 AM 231 views

Australia's Inflation is at its Pinnacle; the RBA will Increase Interest Rates by 50 Basis Points in August, According t

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© Australia's Inflation is at its Pinnacle; the RBA will Increase Interest Rates by 50 Basis Points in August, According t

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According to the most recent research report from Australia and New Zealand (ANZ) banking group analysts, the Australian Q2 inflation data did not alter their recommendation that the Reserve Bank of Australia (RBA) raise interest rates by 50 basis points in August.

Key Quotes

With headline inflation at 6.1 percent y/y and the trimmed mean at 4.9 percent y/y, Australia's Q2 CPI came in within our estimates. Despite the fact that the quarterly result annualizes at 7.4 percent for the headline and 6.1 percent for the trimmed mean, it appears as though we have passed the peak in quarterly inflation.

"This doesn't alter our opinion regarding the RBA's upcoming meetings, where we anticipate 50bp raises. We anticipate that the labour market will continue to tighten even if the target cash rate is still well below the RBA's estimates of neutral. The RBA will then raise the cash rate above the lower limit of what it considers the neutral range as a result of this. As a result, we continue to estimate 3.35 percent for the year's end.

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