UBS Forecasts Two Additional Rate Hikes by the Reserve Bank of Australia, Bringing Rate to 4.60%

Deep News03-27 17:20

UBS has released a report projecting that the Reserve Bank of Australia will implement two more interest rate increases, with the rate expected to reach a new cycle high of 4.60% by the end of August.

The bank anticipates a 25-basis-point hike in May, followed by another 25-basis-point increase in August. However, it also notes the possibility of an earlier rate hike in June. UBS suggests that the impact of rising inflation on the economy and the labor market may be nonlinear.

UBS further expects the RBA's hawkish stance to soften, as the central bank balances its inflation targets with the objective of maintaining full employment, particularly in an environment of tightening financial conditions.

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