On Friday, ANX raised its terminal RBA cash rate to 4.35%.
Credit Suisse Group AG’s Yaying Dong predicts that by September the Reserve Bank’s cash rate will be 4.6%, as services inflation becomes “much more entrenched.”
Stephen Anthony, an economist who has worked for the International Monetary Fund and the Australian Treasury, predicts a longer climb to the same.
NAB has also added another hike to 4.1% after Goldman did the same.
Capital Economics adds that the Fair Work decision means rate hikes in June and July.
Markets are now pricing close to another two rate hikes:
The RBS is still foolishly talking about wage inflation, even though leading indicators clearly show lower ahead, past the crest of the Fair Work decision.
It is housing and energy that is the problem.
The former is inflating rents and prices and will do the same for consumption before long.
Last year’s shock is still working its way through the economy as well. There is a little period of reprieve now as subsidies flow through but the utility bill shock will resume in the coming quarters.
These two segments will add 2.5-3% inflation this year and roughly the same again next.
Both of these are directly the fault of the Albanese Government via excessive immigration and the mismanagement of the gas and power markets.
Real wage falls are going to persist as working-class Albo guts workers.
