Commonwealth Bank expect the Reserve Bank of Australia to hike cash rate by 25bp next week

<p>Commonwealth Bank of Australia economists on the RBA meeting next week. </p><p>In summary from a longer piece:</p><ul><li>In another finely balanced decision,we expect the RBA to hike the cash rate one final time in August to 4.35%</li><li>The RBA noted in July that fresh staff forecasts and the economic data flow would be available for the August decision.</li><li>On balance we expect a still strong labour market and lingering concerns around the inflation and wages growth outlook will outweigh a slightly lower than expected June quarter inflation print and weak retail data</li><li>An updated set of forecasts will be published by the RBA in the August Statement on Monetary Policy on Friday</li><li>We expect the RBA to retain their forecast for headline and underlying inflation to only return to the top of the target band by mid-2025, despite the Q2 23 CPI printing a little softer than the RBA’s implied profile from the May SMP</li><li>We expect the August rate increase to be the final rate hike in this cycle, with monetary policy easing to get under way in the first half of 2024</li></ul><p>—</p><p>The Reserve Bank of Australia policy meeting is on Tuesday 1 August 2023. the statement is due at 2.30pm Sydney time</p><ul><li>0430 GMT</li><li>1230 am US Eastern time</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.