The Reserve Bank of Australia is expected on Tuesday to deliver its fifth hike
this year, raising the cash rate by 25bps to 4.85% — an 18‑year high — with
money markets pricing roughly an 80% probability. The decision will include
updated economic forecasts; Governor Bullock will hold a press conference one
hour after the announcement. AMP economists Diana Mousina and My Bui say
inflation remains well above target, has surprised on the upside with no clear
sign of easing, and caution that failing to hike could damage RBA credibility
and entrench higher inflation expectations. They point to domestic capacity
constraints and a global energy shock as key inflation drivers. A hike would
leave the RBA notably more hawkish than peers, after the U.S., euro area and
Japan central banks recently held rates and the RBNZ paused unexpectedly last
week.
