The Reserve Bank of Australia (RBA) seems more convinced than ever that rates will rise soon.

The four biggest banks — ANZ, CommBank, NAB, and Westpac — are now collectively calling for a June rate hike, which would be followed by several moves over the coming months. Here’s what each bank has to say:


According to ANZ Research economists, the RBA’s patient stance was dropped. This only means that it is now ready for tightening as soon as June.

“We now expect the RBA to lift the cash rate by 15 basis points (bps) in June, with follow-up 25bp rate hikes in July and August,” ANZ research said.

The November 25bp increase will be followed by a further 25bp increase, bringing the cash rate up to 1.1% by 2022.

The cash rate will increase until it reaches 2.2% by 2023.

“At that point, we think the RBA will pause for an extended period, not least because by then the US Federal Reserve will have tightened materially, and the US and global economies may be showing signs of slowing,” ANZ research said.


According to CommBank, a June rate increase should be made as soon as possible.

CommBank head of Australian economics Gareth Aird said the upcoming consumer price index (CPI) readings will be a lot stronger than the RBA’s forecast, which could mean that inflation will be sustainably within the central bank’s target range.

“The Governor confirmed that our interpretation was correct — when asked whether it is necessary to see two more CPIs before raising the cash rate, he replied, ‘we don’t have a plan’.  This made it crystal clear that the RBA do not need to see two further inflation prints before raising the cash rate,” he said.

Aird believes the RBA will increase rates by June. Aird believes that the RBA will eventually raise the cash rate to 1.25 percent in the first quarter of 2023.

“We anticipate the RBA will leave policy on hold over the rest of 2023 given our expectation that the neutral rate is low and the significant expiry of fixed rate home loans which occurs over 2023 will create a natural tightening over the year,” he said.


NAB director for economics Tapas Strickland said the RBA’s latest statements signals that it is contemplating lifting rates over the coming months.

“We conclude households are well placed to handle the first phase of tightening that we expect this year and next, taking the cash rate to around 1.5% to 1.75%,” he said.

However, Mr Strickland said that any further increase in cash rates to 3% (or higher), would be too drastic and could result in undued pressure for households.

“While it is clear the household sector will be able to service a higher mortgage rate, a rise in interest payments relative to income will have to be financed by a reduction in the savings rate, erosion of the stock of savings, or lower consumption than otherwise,” he said.

Mr Strickland says that the cash rate will only reach 2.255% by 2024.

“This results in a more gradual rise in interest payments as a share of income which would still see interest payments at their highest rates since 2012 as a share of income,” he said.


Bill Evans, Westpac economist said that he believed the initial rate increase would occur in August before the RBA meeting.

“Now we expect a much shorter tightening cycle with consecutive rate hikes in June, July, and, August — that point would see the 2020 COVID emergency cuts unwound,” he said.

After these rate hikes, the cash rate will rise from 0.75% to 0.75 percent. In September, the RBA will likely pause.

The cash rate will rise to 1.25% by 2022, with more increases likely in October and November.

“The cycle would resume in February 2023 with three more 25bp hikes in February, May, and June, with the cash rate peaking at 2%,” Mr Evans said.