Reuters poll: RBA to hike 25bps to 4.35% on May 5, say 30 of 33 economists.
Reuters poll: RBA to hike 25bps to 4.35% on May 5, say 30 of 33 economists. Over a third now see rates at 4.60%+ by year-end vs none in March.
Strait of Hormuz closure keeps oil above $100; CPI at 4.1%. Summary: A Reuters poll of 33 economists conducted April 27 to 30 found 30 expect the RBA to raise its cash rate by 25 basis points to 4.35% at its May 5 meeting, a third consecutive increase More than a third of forecasters now see rates reaching 4.60% or higher by the end of 2026, compared with none in the March poll, representing a significant shift in the distribution of terminal rate expectations in just one month The RBA has been raising rates since early February 2026, with inflation having remained above its 2% to 3% target since mid-2025 Annual CPI rose to 4.1% in the most recent quarter from 3.6%, partly reflecting higher fuel prices; core CPI edged up to 3.5% from 3.4% The Strait of Hormuz closure, a route through which roughly a fifth of global oil supply passes, has kept crude prices mostly above $100 a barrel, with oil briefly trading above $126 this week Economists note that even if the Strait reopened immediately, trimmed mean inflation is expected to spike in the second quarter as the energy shock feeds through to core price measures The RBA’s experience in 2025, when underlying inflation rebounded almost immediately after it cut rates, is seen as having shifted the board’s risk tolerance toward maintaining higher rates for longer A majority of economists, 18 of 31, still expect the cash rate to hold at 4.35% through year-end, but that majority has narrowed sharply Among the major banks, ANZ, CBA and NAB expect rates to peak at 4.35%, while Westpac forecasts a higher peak of 4.85% Inflation is expected to average 3.8% this year, up from a pre-war forecast of 3.1%, while the median GDP growth forecast remains unchanged at 2.2% Entrenched inflation expectations are flagged as the primary risk, with economists warning that a failure to act decisively…