With the Reserve Bank of Australia having left its cash rate unchanged for two consecutive meetings, we think its tightening cycle is at an end. Indeed, the RBA appears increasingly concerned that rate hikes are starting to take their toll on household spending. At the same time, the Bank also believes that it has tightened policy sufficiently to return inflation to its 2-3% target over the next two years. If we're right that incoming data on economic activity will disappoint, while inflationary pressures continue to ease, it's unlikely that the Bank will hike rates again.
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