More rate rises on the way

Our Corporate Finance Associate, Jack Colreavy, discusses why more rate rises are on the way following the recent increase in the cash rate made by the RBA.

The RBA has increased the cash rate for the first time in 10 years, taking the cash rate from 0.10% to 0.35%.

 

Likewise, the US Federal Reserve increased its fund's rate by 50 bps overnight to 0.75% - 1% and has flagged more rises in the future.


 

Read Jack's thoughts:

 

"Big news yesterday with an increase in the cash rate from the RBA. This was the first increase in over 10 years, taking the cash rate 0.35%. Moving forward I do see another rate rise in June. The degree of it depends on the wage data, which is coming out later in May. Now, if that's above 3%, expect up to a 40 basis point increase to 0.75%.

Looking forward to the end of the year, I think the RBA is on the back foot and will make up for lost time and take interest rates to 1.5% in order to combat this inflation problem, which is starting to the spiral out of control."

 


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