Market pundits argue that interest rates are still going down, not up, because inflation is declining, albeit at a slower pace than many had expected.
Already a subscriber?While bond traders are pricing in a 50 per cent chance of another rate increase in Australia before Christmas to keep a lid on inflation, some pundits say the fears are overblown with the next move in the cash rate still likely to be lower., prompting speculation the Reserve Bank of Australia will have to upgrade its forecasts when it meets next week to reflect the slow progress.
He also highlighted the ongoing and severe per capita recession with households “doing it very tough”. after the consumer price index last week rose at an annual pace of 3.6 per cent, well outside the RBA’s mid-point target of 2.5 per cent. “The RBA won’t need to think about rate hikes. Rate cuts are still on the table but because the rate of inflation is so much higher in Australia than the US, those cuts are going to come much later.”
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