National Australia Bank (NAB) anticipates the Reserve Bank of Australia (RBA) will likely implement further interest rate hikes in the coming months. Despite some volatile components trending downwards in November, NAB senior economist Taylor Nugent asserts that underlying inflation pressures remain robust. According to Nugent, the central bank is unlikely to be sufficiently confident that current economic conditions will adequately curb rising prices.
NAB economists point to the ongoing resilience of the labour market and existing capacity constraints within the Australian economy as key factors influencing their outlook. These conditions, they argue, necessitate a more proactive approach from the RBA to manage inflation risks effectively. NAB is one of Australia’s largest financial institutions, offering a wide range of banking and financial services to individuals and businesses.
As such, NAB projects that the RBA will make “a modest recalibration in policy to lean more firmly against inflation risks”. The bank has specifically pencilled in interest rate increases for February and May of the upcoming year. This forecast underscores NAB’s assessment of the current economic landscape and its expectations for monetary policy adjustments.
