With the RBA leaving the cash rate on hold for the third month in a row, AMPs Shane Oliver has provided his insight on whether or not the RBA has finished with rate hikes.

Shane’s key points are as follows:

• It’s likely that the RBA’s cash rate has peaked with numerous indicators pointing to slower economic growth and inflationary pressures easing.
• While the risk in the short term is still on the upside for rates or a delay to the start of rate cuts, our base case is that rates will be on hold until early next year ahead of rate cuts starting in the March 2024 quarter.
• Rate cuts through next year should help growth to stabilise and pick up from late 2024.
• Absent much stronger wages growth, a further drop in unemployment and/or a reversal of the downtrend in inflation, the RBA is expected to leave interest rates on hold for the rest of this year ahead of rate cuts next year. We are allowing for 4 rate cuts through 2024 as the economy and inflation slow further.

Please find the full article here.