Australia Nears Cash Rate Peak Following Latest Hike to 4.85%, ANZ Says

MT Newswires Live14:01

Australia is now at or close to the cash rate peak following the central bank's Tuesday decision to increase the rate by 25 basis points to 4.85%, ANZ said in a same-day report.

Although the hike was widely expected, the decision was split with six members voting for the increase and three against it, suggesting some reluctance among policymakers to keep tightening, ANZ said.

While the tone of the post-meeting statement remains hawkish on the inflation front, it also acknowledges the slowdown in economic activity.

The Reserve Bank of Australia's inflation forecasts are higher over 2027 than ANZ expected, and the central bank is also concerned that some measures of inflation expectations have risen.

ANZ is not forecasting another rate increase, but it still acknowledged some risk of a hike in December or February next year if further evidence emerges of inflation expectations moving higher or if upside risks to inflation end up materializing.

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