Recently, the Governor of the Reserve Bank of Australia (RBA), Philip Lowe, spoke about the state of the economy and interest rates at the National Press Club in Sydney. Despite the pause in interest rate hikes, the RBA remains committed to tightening monetary policy, with further rate hikes expected.

In April, the board chose to keep interest rates steady to evaluate the impact of previous hikes on the economy. Lowe defended the board’s decision, arguing that it was necessary to avoid more persistent inflation and higher interest rates and unemployment.

ANZ Bank and Commonwealth Bank have both predicted that interest rate hikes are likely to continue, with the latter expecting a terminal rate of 3.85%. CBA’s head of economics, Gareth Aird, has noted a softening in the RBA’s rhetoric.

The RBA’s focus on reducing inflation to the bank’s target of 2-3% has prompted the possibility of further tightening of monetary policy. Lowe pointed to Australia’s high inflation rate, which is the highest it has been in 30 years, and its low unemployment rate, which is at its lowest in 50 years.

It is too early to discuss interest rate cuts, according to Lowe, and the balance of risk lies in further rate rises. The RBA’s decision to hold rates steady in April was a temporary measure to assess the impact of previous rate hikes, but it does not indicate that rate increases are over.

In conclusion, the RBA’s stance on interest rate hikes, along with ANZ Bank and Commonwealth Bank’s predictions, indicates that further rate hikes are likely. Stay up to date with the latest news on Australia’s economy and interest rates by following developments from RBA, interest rates, ANZ, and CBA.