Markets predict slim chance of rate hikes

after the monthly gauge showed inflation has slowed to just 5.6 percent money markets suggest interest rates will be left on hold when the Reserve Bank board meets next week but according to the world's most senior Central Bankers the bias will be and is right now still for rates to rise to crush inflation we will decide on a meeting by meeting basis but we know that we

have ground to cover and if our Baseline stands then we also know that we will very likely hike again in in July Christine Lagarde and the European Central Bank hosted that conference where there was a consistent message that the fight against inflation is not yet over by the way I'm in the market I don't think things were nearly done at the moment and they've got a

number of further increases uh priced in for us my response to that will be well we'll see uh because we know as we were saying earlier we're essentially evidence driven in that sense so yeah we'll we'll make our decisions based on that and most influential of all those Central Bankers is the U.S federal reserve chair Jerome Powell who says that Joel just like here in Australia

the strong labor market and wage Rises continue to drive underlying inflation and therefore interest rates as well really policy hasn't been restrictive for very long we started at you know negative real interest rates and we've now moved up to where we actually are in restrictive territory but we haven't been there very long so we believe there's more restriction coming and what's really driving it uh you

know to Andrew's point and Christine's as well is very strong labor market we've got a labor market that you know where jobs are being created there are strong wage gains and that's driving spending driving real incomes and driving spending which is driving more demand and continuing to drive labor markets so the the labor market is really is really pulling the economy here in Australia the ASX

right predictor now suggests is just a 16 chance of a rate rise next Tuesday that compares with a 51 chance pretty much 50 50 that was on Monday last week