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VIEW: NAB Revises Up Rate Forecast To 4.6%

RBA

NAB has revised up its RBA cash rate forecast to 4.6% from 4.35% as it now sees inflation becoming entrenched and increased risks from rising wages. It is uncertain when the two 25bp moves will occur but is “pencilling in” July and August for now. But the higher rates will come at a cost and NAB has also revised down its growth projections.

  • “Taking rates to 4.6% will weigh more heavily on growth and we have revised down our expectations for growth over 2023 to just 0.5% and pulled back expectations for 2024 to around 0.9%”
  • “We still see the RBA cutting interest rates back towards neutral in 2024 as a “forward-looking” central bank sees the slowing in growth and unemployment rising”

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