Bank consensus builds for near term RBA hike as economists cite sticky inflation

Major Australian and global banks have converged on a consensus expecting the Reserve Bank of Australia (RBA) to hike interest rates again this year, following hotter-than-expected July inflation figures. Commonwealth Bank of Australia (CBA) became the latest institution to shift its call to a 25 basis point hike in November, bringing the terminal cash rate forecast to 4.60%. CBA joins ANZ, Goldman Sachs, Citi, and UBS in projecting a November tightening move, while National Australia Bank (NAB) and Deutsche Bank are anticipating an earlier rate increase at the September meeting. The growing consensus among six of the seven major institutions tracked reflects persistent core inflation and low central bank tolerance for price surprises. Westpac remains the lone dissenter, expecting the RBA to keep rates on hold due to cooling labor market dynamics and wage moderation. This broad shift significantly alters the near-term landscape for Australian rates and currency markets. The heightened expectations of monetary tightening are likely to sustain upward pressure on short-end Australian government bond yields and provide underlying support for the Australian dollar (AUD/USD).