RBA Interest Rates to plummet early 2023, page-1997

2 more should be enough to push us into a recession and kill inflation, though still a risk more will be needed after those 2 if they don’t work



Goldman Sachs chief economist Andrew Boak said he expected another 0.25 percentage point rate increase in July, but said there was clear risk the cash rate would need to go higher than 4.35 per cent.

RBC chief economist Su-Lin Ong agreed the RBA would need to increase the cash rate again.

‘‘Inflation is uncomfortably high and the shift in assessment of risk in the last month is likely largely due to the minimum wage decision and maybe the lift in public sector wage caps,’’ she said.

‘‘An [award wage] increase of 5.75 per cent without any productivity offset is not consistent with the inflation target.’’

Deutsche Bank chief economist Phil O’Donaghoe said a 4.6 per cent cash rate was likely after several weeks of data confirming the economy was proving resilient to higher interest rates. This includes an extremely tight labour market. While the jobless rate increased to 3.7 per cent from 3.5 per cent in April, the unemployment rate is very low by historical standards, and wages growth has accelerated to a decade high.