RBA Reaction
- Written by Chief Investment officer, Brett Reynolds, Tiger Brokers Australia
As the market expected, the RBA has left interest rates on hold. Given the significant lift in rates we’ve seen in recent months, it is not a surprise to see the board pausing to see the impact this is having.
This does not signify an end to the increase in interest rates. I expect rates to go higher, likely to four percent. The RBA will most likely hold rates again in May, but come the middle of the year another 25 basis point rise can be expected. While the rate of inflation is easing, it is still incredibly high. The RBA will continue to seek to bring inflation under three percent.
For our local share market, this is likely to result in indexes hitting all time highs. Our banks remain solid. April is likely to be a strong month on the ASX.
Our interest rates remain low against other developed economies. Inflation in many other countries is also higher, resulting in central banks continuing to raise interest rates. The outlook in Australia is much brighter than many other countries.
