RBA To Raise Rates A Modest 25bp In June, Some Call For 40bp (RTRS Poll)

"Australia's central bank will raise rates by a modest 25 basis points for a second straight meeting in June, still opting to move more slowly than most of its peers in a campaign to bring down soaring inflation, a Reuters poll of economists found. With the economy recovering smartly from the pandemic and inflation at a 20-year high of 5.1%, well above a 2-3% target range, the Reserve Bank of Australia has only recently changed its tune on the need to raise interest rates. The median forecast in the May 26-June 2 Reuters poll of 35 economists showed the RBA will lift its official cash rate by another 25 basis points to 0.60% from the current 0.35% at its June 7 meeting. Nearly two-thirds of respondents, 22 of 35, forecast rates at 0.60%, while 11 predicted a 40 basis point increase to 0.75%, where rates were before the pandemic. Only one expected a 50 basis point hike to 0.85% and one other expected no move. But at a time when many of its peers, including the Reserve Bank of New Zealand, the Bank of Canada and the U.S. Federal Reserve have already delivered more than one 50 basis point rate increase, some analysts say the RBA is moving too slowly."