How the federal budget may change the RBA’s view on interest rate hikes
The RBA’s latest forecasts now assume no further rate rises will be needed for inflation to fall back to the central bank’s 2-3% target range by mid-2025.
Inflation, as Prime Minister Anthony Albanese has said, is “a tax on the poor”.
The great budget challenge for him and Treasurer Jim Chalmers has been to deliver help to Australians struggling with cost-of-living pressures without adding to inflation.
So has the government achieved that aim? While it’s too soon to be certain, given the vagaries that have beset economic forecasting in recent years, in my view the measures announced do not add to the prospect of the Reserve Bank of Australia raising interest rates further.
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