The Reserve Bank of Australia is unlikely to cut interest rates before 2027, and a fourth rate hike remains a distinct possibility, according to a new poll of economists.
The consensus view signals that the central bank’s tightening cycle may not be over, even as the housing market struggles under recent capital gains tax reforms.
Bond traders have already priced in a hawkish trajectory, maintaining a 60% probability of a fourth interest rate increase by December.
Bond traders have already priced in a hawkish trajectory, maintaining a 60% probability of a fourth interest rate increase by December.
This market positioning reflects skepticism that the RBA will pause its tightening campaign, driven by persistent inflationary pressures that have kept the central bank on alert.
The Financial Review’s quarterly survey highlights a divergence between the housing sector’s weakness and the broader economic resilience.
While the property slump has intensified following changes to capital gains tax rules, economists argue that underlying inflation risks prevent an early pivot to easing.