The Reserve Bank is overwhelmingly expected to hike rates at its first policy meeting of the year – but should it?
There’s a powerful consensus for a cash rate rise to 3.85%, from 3.6%, on Tuesday.
But not every expert is convinced it’s a good idea.
They warn a hike would be a “policy error” – one that could unnecessarily undermine the recent improvement in the economy after a lengthy period of very weak growth.
As the central bank’s monetary policy board met on Monday, Bloomberg reported only Goldman Sachs, Deutsche Bank and AMP were among the holdouts suggesting no change to the cash rate at the end of the two-day meeting on Tuesday.
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