Fourth rate hike bombshell: Major banks warn ‘possibly’ in weeks

Reserve Bank of Australia Governor Michele Bullock is now being watched closely to see if RBA will “drag their feet due to political and public pressure”. Picture: NewsWire / Christian Gilles The country’s biggest banks warn a fourth rate hike is now possible by month end, after a wild overnight swing put RBA’s “new economic reality” in focus – with even a fifth spike floated. Economists from Australia’s biggest bank, Commonwealth Bank, warn the RBA is grappling with a “new economic reality” of structurally higher interest rates – with overnight market data now pricing in a 60 per cent chance of a rate hike as early as September 29. 30 day interbank cash rate target implied expectation of change. Source: ASX The CBA Update said “we expect the RBA board to again hike interest rates in November, or possibly as early as late September”. CBA head of Australian economics Belinda Allen said “we now expect a final rate hike this cycle in November to take the cash rate to 4.60 per cent”, but added “the 28-29 September meeting is live with a hike firmly on the table given the recent data flow, language shifts by the RBA in recent communications and market pricing”. The ASX rate tracker pivo...