2021.06.2406:50:00UTC+00NAB Economists See 2024 RBA Rate Hike More Likely

A rate hike by the Reserve Bank of Australia is more likely in 2024, NAB economists said Thursday. However, NAB economists said they can see a probability of the RBA moving in the second half of 2023.

Markets should price in this risk, given the high bar the central bank has given itself on wages growth being sustained at 3 percent plus, NAB Economics Director Tapas Strickland said.

NAB economists predicated their view on the RBA sticking to its recent evolution in monetary policy, that being trying to achieve the maximum sustainable employment by waiting for actual inflation to be sustainably in the band before tightening, instead of hiking on a pre-conceived notion of where NAIRU is.

On Wednesday, RBA Assistant Governor Luci Ellis stressed that full employment is essential for strong wage growth that can keep inflation with the 2-3 percent target. Elsewhere, some economists predicted a rate hike in late 2022 and early 2023. The central bank's forward guidance is for a hike in 2024.