RBA expecting to be raising rates probably in the second half of 2018 - Westpac

Bill Evans, Chief Economist at Westpac, explains that RBA’s forecasts of growth lifting to well above trend in 2018 and 2019, and inflation returning to the middle of the target band in 2019 would imply that it is expecting to be raising rates probably in the second half of 2018.

Key Quotes

“The Bank has the luxury to delay any rate decisions until it can clearly test whether its forecast dynamics around higher consumer spending growth, a solid lift in investment spending, rising wages growth, benign housing developments and falling unemployment (along with what we suspect a falling AUD) come to pass.”

“We are much less confident about that scenario and therefore expect rates to remain on hold next year.”