Institutional analysis: The RBA may raise interest rates for the ninth time in a row

On February 6, the Reserve Bank of Australia is expected to raise its benchmark interest rate for the ninth time in a row at its first policy meeting of the year on Tuesday. The hike could take the cash rate to 3.35% from 3.10%.

The recently released fourth-quarter CPI data and core inflation data were higher than expected. As a result, the RBA will raise its inflation forecast this week. The RBA’s guidance this week will also remain hawkish, as the bank focuses on entrenched demand conditions across the economy and the fact that it may not yet be able to forecast a return to its 2-3% target for inflation over the expected cycle.