The RBA Shadow Board at ANU has voted in favour of a second successive interest rate rise.
The RBA Shadow Board at ANU has voted in favour of a second successive interest rate rise. Australia's high inflation rate remains a "significant concern" for the RBA Shadow Board at The Australian National University (ANU), which has voted in favour of a second successive rise in interest rates. The Shadow Board is 65 per cent confident the official cash rate should be raised to above the current setting of 0.35 per cent for June. It attaches a 10 per cent probability of keeping the overnight rate on hold and a 25 per cent probability that a decrease is appropriate. This has dropped significantly from the Shadow Board's analysis from May when it had 47 per cent confidence that keeping the cash rate steady was the appropriate policy setting, and down from 86 per cent from April. Chair of the ANU RBA Shadow Board Dr Timo Henckel said the annual (headline) CPI inflation rate of 5.1 per cent for the first quarter of 2022 is a significant concern for the RBA, as it lies well outside the official target band of two to three per cent. "The unemployment and spending data support the view that the Australian economy is re-equilibrating after the pandemic, but growing challenges for the global economy and more cautious projections about the future by consumers and businesses, may slow the recovery considerably," Dr Henckel said.
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