The attached note looks at the RBA's first meeting for this year and the outlook for the official cash rate. The key points are as follows:
The RBA will end quantitative easing this month.
While it now sees unemployment falling below 4% and higher inflation it is prepared to be "patient" for now on rates.
We expect rate hikes to commence in August.
Ultimately, we see the cash rate rising to around 1.5 to 2% in the years ahead but it's a bit of guess and the RBA will only raise rates as far as necessary to cool inflation.
Rate hikes from later this year are unlikely to be enough to threaten the economic recovery but they will add to the slowdown in the property market where we see dwelling prices peaking later this year.