- JPMorgan expects the next RBA move to be an interest rate hike in Q3 2015
- No longer expects further RBA interest rate cuts
Headlines via Bloomberg citing JPMorgan research note
Added – OK, here’s more:
- Had forecast one more cut in August 2014
We had forecast a final cut in this cycle for three main reasons:
1) the stop-start transition away from mining investment as the main driver of activity, which is delivering below-potential GDP growth and a rising jobless rate;
2) the stubbornly high AUD, which continues to hobble much of the traded goods sector and is helping to suppress inflation; and
3) growing fiscal drag, which left monetary policy as the sole free policy instrument.
These factors remain important influences on policy, but no longer seem sufficiently troublesome to trigger a final rate cut in this cycle. Instead, they now argue for the maintenance of the current level of policy support
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Q3 2015 is a long way off … a lot can happen between now and then …
