Market Update – Interest Rate Outlook from the RBA

  • The Reserve Bank (RBA) has revised its growth and inflation forecasts for 2023, lowering them compared to previous estimates.
  • Weaker outcomes in household consumption and business investment contribute to a lowered growth forecast of 1.2% for 2023.
  • Inflation forecasts have also been reduced due to weaker-than-expected outcomes.
  • Wages growth has been downgraded, and the bank is concerned about the risks to the inflation outlook.
  • Further monetary policy tightening may not be necessary, but the labour market and services inflation will be closely monitored.
  • The RBA aims to achieve a target inflation rate of 2.9% by mid-2025.

What does all of this mean for you?  We may be reaching the top of the current interest rate cycle.