Australia's central bank to pause on June 16; a minority still see Q3 rate hike: Reuters poll

Australia’s central bank is set to pause its tightening cycle on June 16, according to a Reuters poll of economists, as a cooling economy gives the Reserve Bank of Australia room to assess the impact of three consecutive 75-basis-point hikes. The RBA has raised the cash rate by 75 basis points since February to 4.35%, reversing last year’s easing, while inflation remains elevated. In the first quarter, GDP growth slowed to 0.3% from 0.9%, and unemployment rose to 4.5% in April, the highest since November 2021. Of 45 economists polled June 5-11, 42 expected the cash rate to stay at 4.35% on Tuesday. While headline inflation eased to 4.2% in April from 4.6% in March, it is still above the 2%-3% target range for nearly a year, and core inflation edged up to 3.4%. Most projected no further moves through September, though 18 still expect at least 4.60%. NAB’s Taylor Nugent argued the RBA can hold, while AMP’s My Bui warned inflation expectations could become unanchored.