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MNI Insight: Economics Pointing To Rate Hikes Into 2023

Executive Summary

  • The RBA began its first monetary policy tightening cycle in May this year, the first since October 2009. Given the pace at which rates have risen, 250bp in 5 months, and the expectations of more to come given elevated inflation, there continues to be a lot of focus on the RBA, what it is thinking and its decision-making process.
  • Economic fundamentals are pointing to further monetary tightening ahead.
  • We have estimated a simple policy reaction function and it is signalling 25bp rate hikes at the next six meetings to 4%, slightly above market pricing.
  • For the full piece, see here:
  • AU rate equation.pdf

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