RBA seen on extended hold – Standard Chartered

Standard Chartered Global Research discusses the Reserve Bank of Australia’s decision to raise the cash rate to 4.60% in a unanimous move, noting a dovish tone from Governor Bullock.

RBA hike but dovish forward guidance

"The Reserve Bank of Australia (RBA) raised the cash rate to 4.60% at the 29 September meeting, as we had expected in a unanimous decision."

"The statement cited the materialisation of upside risks to inflation but acknowledged slowing economic growth, easing labour-market conditions and falling housing prices while keeping the door open for more hikes “if needed”."

"Conversely, we picked up a more dovish slant from Governor Bullock at the press conference, who indicated that a rate hike and a hold were discussed in the meeting."

"She did not talk up the possibility of another rate hike in Q4, and emphasised the lags of monetary policy transmission from the rate hikes so far."

"Our takeaway remains that the central bank is probably done with rate hikes."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)