TD Securities forecasts no change in Australia’s cash rate, citing restrictive policy and softer Q2 inflation data.
The Reserve Bank of Australia is expected to keep its cash rate unchanged at 4.35% in August, as policy remains restrictive and economic activity slows. TD Securities strategists note that lower-than-expected Q2 trimmed mean CPI provides room for the pause, with markets pricing near-zero odds of a hike.
Earlier rate increases are still filtering through the economy, particularly in housing, reducing the need for further tightening. While the August Statement of Monetary Policy will include updated forecasts, sharp downgrades to inflation projections are unlikely despite elevated oil prices.
Consensus aligns with TD’s view, anticipating no change to the 4.35% rate.