Australia on rate rise

Australia is facing a potential rise in inflation, with economists predicting a jump to 3.8% in the June quarter, up from 3.6% in March. This uptick could pressure the Reserve Bank of Australia (RBA) to increase its cash rate to 4.6%, marking a 14th hike in the current cycle. However, forecasts suggest that the RBA might hesitate to raise rates further, fearing a recession as the economy shows signs of weakness. The upcoming inflation data release is critical, as it will influence both economic policy and political strategies ahead of elections. Some analysts warn that a rate hike would be challenging for Australians, especially given the rising costs of mortgages since previous rate increases began in May 2022. Overall, the debate over the RBA's inflation strategy continues, with differing opinions on the need for further tightening versus supporting economic stability.