The rise in trimmed mean inflation into the RBA’s 2-3% target band for the first time in six years has only added to the aggressive repricing in the outlook for the RBA’s policy rate over the past month. And given that the RBA refrained from intervening this week to prevent the yield on the April 2024 bond from surging far above its 0.10% target, we now expect the Bank to signal that rates will rise before 2024 at next week’s meeting. That means that the yield target will no longer be fit for purpose and we expect it to be ditched altogether.
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