Anticipated Hawkish Turn From the Reserve Bank of Australia Could Lead to Interest Rate Hikes

According to Fxstreet, market participants are keeping a watchful eye on the Reserve Bank of Australia (RBA), suspecting a potential shift back to a hawkish monetary stance. Despite the expectation that the Official Cash Rate (OCR) will remain unchanged, the rising tide of inflation coupled with a persistently tight job market makes a prospective interest rate cut less likely. Speculators are accordingly leaning more towards the possibility of multiple interest rate increases before the year's end. During a press conference in March, RBA Chairperson Bullock indicated a steadfast open-mindedness, emphasizing the necessity of sustained confidence in inflation maintaining a trajectory towards the central bank's target range of 2%-3%. However, any optimism has been tempered by macroeconomic data that doesn't appear supportive of an easing policy. The annual Consumer Price Index (CPI) rate currently exceeds the RBA's target, raising speculations of a hawkish policy pivot for the upcoming period.