Goldman Sachs lowered their terminal RBA rate forecast to 4.6% (previously at 4.8%)

<p>Yesterday we had the latest official inflation report from Australia:</p><ul><li><a href="https://www.forexlive.com/news/australian-q2-headline-cpi-08-qq-vs-10-expected-20230726/" target="_blank" rel="follow" data-article-link="true">Australian Q2 Headline CPI 0.8% q/q (vs. 1.0% expected)</a></li></ul><p>Responses so far:</p><ul><li><a href="https://www.forexlive.com/centralbank/aud-decline-in-inflation-should-be-enough-to-keep-the-rba-on-hold-at-their-next-meeting-20230726/" target="_blank" rel="follow" data-article-link="true">AUD – decline in inflation should be enough to keep the RBA on hold at their next meeting</a></li><li><a href="https://www.forexlive.com/centralbank/icymi-nab-changed-forecast-for-rba-next-week-to-on-hold-prior-was-25bp-rate-hike-20230726/" target="_blank" rel="follow" data-article-link="true">ICYMI – NAB changed forecast for RBA next week to 'on hold' (prior was +25bp rate hike)</a></li></ul><p>Via Goldman Sachs, also trimming rate hike forecasts for the Reserve Bank of Australia:</p><ul><li>lowered their terminal RBA rate forecast to 4.6% (previously at 4.8%)</li></ul><p>But still expecting a rate hike next week (the Reserve Bank of Australia meeting is August 1), citing:</p><ul><li>We acknowledge material risk that the RBA remains on hold in August, but lean slightly towards another hike given still elevated underlying and services inflation, the stronger-than-expected labour market, and the rapidly reflating housing market. </li><li>We expect a final hike in November alongside finalisation of the Statement on the Conduct of Monetary Policy – which we expect will effectively require the RBA to target a lower inflation target … that is, 2.5 per cent, rather than allowing the top of the 2-3 per cent target band.</li></ul>

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