Rate hikes coming next year?

by Adam Smith22 Dec 2015
Australia is "third in line" for interest rate hikes, analysts have claimed. 

The US Federal Reserve last week made the long-expected move to lift rates in the country after holding them steady for nearly a decade. While the move is likely to see Aussie rates remain on hold as the Australian dollar falls versus the greenback, a Sydney Morning Herald report has claimed Australia's next tightening cycle may be less than a year away. 

According to the report, Australia could follow the US and the UK in lifting the official cash rate before the end of 2016. 

The report quoted Bank of America Merrill Lynch as saying the Reserve Bank could look to remove accommodative policy by the end of next year. Market Economics' Stephen Koukoulas was more hawkish, The Herald said, claiming  there should be an "interest rate hiking bias at least" by June next year.

COMMENTS

  • by MCC 22/12/2015 10:46:45 AM

    Yes well we might just wait & see because regardless of US rate rises I'd like to see some strong realistic & truthful reporting on ''underemployment'' in Australia & where the determined growth drivers for the Oz economy will be in 2016? If we still reside in a ''consumption'' driven economy (it represents 50% of GDP in round terms), without strong & stable income generating employment then we better look for another way to expand an economy rather than off the back of consumption. Without expansion I cannot see inflation being a major impact & without that,are we really going to see even the hint of a bias towards rate rises? Just putting it out there!