The prices quoted on the Australian Securities Exchange implied a 52% probability of an increase in the Reserve Bank cash rate next Tuesday and a 48% probability of no change.
What if the Reserve Bank achieves something truly remarkable – a steady decline in inflation without further interest rate increases, and without bringing on a recession?
The Reserve Bank decided to keep interest rates on hold at 4.1% because it thinks there’s a chance – just a chance – it has lifted them all it needs to.
The RBA’s latest forecasts now assume no further rate rises will be needed for inflation to fall back to the central bank’s 2-3% target range by mid-2025.