RBA: Rate hikes are likely to be "some time away" - Barclays

Barclays’ analysts offer their afterthoughts on the RBA’s monetary policy decision announced a day before.

Key Quotes:

“We expect the RBA to remain patient and wait for signs of a more broad-based recovery across businesses and household incomes before firmly signalling any change in monetary policy stance

Governor Lowe clearly stated in his parliamentary testimony that, within the RBA, the preference is for rates to move up, not down, from current levels

However, the bar for hiking rates is high, hence, rate hikes are likely to be "some time away"

Further, board member Ian Harper indicated that the rate of growth, while improving, remains too slow to justify a rate hike

We forecast the RBA will raise the policy rate by 25bp at the August 2018 MPC meeting followed by a 25bp rate hike in November”