Perpetual expects RBA to raise rates 25 basis points, then pause tightening
TLT•Perpetual expects the RBA to raise rates by 25 basis points to 4.85% on November 3, then pause until at least February. Australian markets price in another 1.25 quarter-point increases, with potential cuts in the second half of next year.
1. RBA rate outlook
The RBA is expected to raise rates by 25 basis points to 4.85% on November 3, then pause until at least February. Australian markets price in a further 1.25 quarter-point increases and potential rate cuts in the second half of next year.
2. Global rate pressures
The Nasdaq’s 9% decline from its October peak has lowered expected peak interest rates, outweighing rising oil prices in bond markets. The Federal Reserve is expected to raise rates again in December, while elevated inflation is expected to keep Australian and US rates higher for longer.
3. AI investment
AI investment is expected to remain substantial over the next few years, limiting scope for early or significant interest rate cuts.
