This is not meant as financial advice just a house view from a respected Australian investment manager. If hes right it may be a bit of a jump on your mortgages if your on the variable rate.
- The Reserve Bank of Australia is continuing to warn of further interest rate increases as interest rates are returned to 'more normal levels'. This is evident in the minutes from the April Board meeting which refer to the latest rate hike as just another step in the process of returning interest rates to more normal levels.
- It's a close call as to whether the next move will be in May or June, and this partly depends on next week's inflation data. Nevertheless, we are allowing for another 0.25% cash rate hike in either May or June and the cash rate rising to 5% by year end, before moving up to a peak of around 6%, or just above, in 2012.