RBA could raise rates even faster than we anticipate

We’ve long been arguing that the RBA will lift rates more sharply than most analysts anticipate and the RBA’s surprise 50bp rate hike this week is consistent with our view that rates will reach 3% by early-2023. We’ve pencilled in additional 50bp hikes in July and August, but with inflation set to accelerate further, consumption growth still very strong and the labour market remaining very tight, the risk is clearly that the Bank will continue to hike aggressively for even longer.