RBA: OCR peak now seen at 4.85% – Goldman Sachs

In its latest client note, analysts at Goldman Sachs raised its terminal rate hike expectation for the Reserve Bank of Australia (RBA) after the central bank surprised markets with two consecutive rate hikes.

Key points

The bank now expects a 4.85% peak in September from 4.35% previous forecast.

They saw a hawkish shift in the RBA's reaction function during Lowe's speech earlier today.

They also noted that the Q1 GDP report showed a surprise acceleration in unit labor costs.

The bank now expects hikes in July, August and September. Previously it had expected a 25bp hike in July.

Related reads

• Aussie Gross Domestic Product (Q1): Miss by 0.1% QoQ and YoY, AUD/USD in 15 pip rangesteady
• RBA’s Lowe: Too early to declare victory in the battle against inflation