TD Securities indicates that the Reserve Bank of Australia is expected to raise interest rates by 25 basis points in February, with a tentative plan to implement a further 25 basis point hike in May. Prashant Newnaha, a strategist at TD Securities based in Singapore, pointed out: "Monthly data shows that rents and the cost of newly built housing continue to rise, which poses an upside risk to the RBA's inflation expectations."
He stated that if the momentum of inflation slows further, the RBA could potentially enter an extended period of maintaining interest rates after the February hike. Internal forecasts from TD Securities show that the quarterly inflation rate is expected to be recorded at 0.9%, a figure that would stabilize the annual trimmed mean core inflation rate at 3.3%, significantly exceeding the midpoint of the 2%-3% inflation target range; this level of inflation performance should be sufficient to prompt the RBA to announce a 25 basis point rate hike at its February policy meeting.
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