VIEW: J.P.Morgan Now Look For OCR Liftoff In November

J.P.Morgan note that they "have held back from joining the local chorus for 2H21 hikes as the window of opportunity to do so also straddles the period where macro-pru is likely to bite and take away existential pressure to move. The impulsiveness of the shift over the last two meetings has been striking though and with such a degree of signaling today, rate hikes this year seem likely. We add 25bp hikes for November, February and April. Moving instead at the next meeting in August seems quite a gamble given it ascribes no option value to waiting for what the housing market does under tax and macro-pru measures in spring, and also takes as given that the nation can remain delta-variant free. If that period can be negotiated the path would be there for a hiking cycle, and also makes October a fairly live prospect for the first move."