Expectations for a rate hike today from the Reserve Bank of Australia kicked into high gear on the back of comments last week from Deputy Governor Hauser:
The cavalcade of rate hike forecasts followed soon after:
- Australian bank analysts are piling on to forecast an RBA rate hike next week
- Westpac lifts RBA peak rate forecast to 4.35%, sees RBA hiking rates in March and May
- ANZ joins banks expecting March 17 RBA rate hike as oil shock lifts inflation risks
- CBA expects RBA to hike rates in March and May as inflation risks rise
- Reuters poll: RBA seen raising cash rate to 4.10% on March 17, then 4.35% by end-2026
- RBA preview: a rate hike is widely expected; policymakers to take a cautious approach next
The jump in oil prices has added to already existing higher inflation pressures in Australia. The Reserve Bank of Australia raised rates in February prior to the war on the back of rising inflation:
- RBA unanimous 25bp hike, lifts inflation forecasts and signals more tightening in 2026
- Australian dollar gets a lift as the RBA delivers on a hawkish rate hike today
Since the Feb rate hike we've had data indicating higher inflation again (pre-war) and a tight labour market:
- Australia unemployment total falls for fourth straight month. RBA March rate hike prospect
- Australia CPI beats estimates, lifting RBA hike odds and boosting Aussie dollar
All the pieces are in place for a 25bp rate hike from the Bank today. Buckle up, its coming, like it or not. The unknown is how hawkish the Statement is going to be. Reserve Bank of Australia Governor Bullock speaks an hour later, how hawkish she will be is also an unknown. I suspect more hawkish than not.
For the Australian dollar, the expectations of the hike today habve underpinned it, but global developments sent it lower last week. A hawkish RBA today should once again underpin it.
