The RBA has elected to keep the official cash rate 'on hold' at 1.5 per cent at its June 2018 monetary policy meeting.
It marks the 22nd month and the 20th meeting in a row that the RBA has decided to sit on its hands – the longest stretch on record.
According to HSBC chief economic Paul Bloxham, rates are likely to stay on hold until the second quarter of 2019 – at which point the RBA will begin to hike.
"With inflation and wage growth low, albeit both past their troughs, the RBA remains firmly on hold," Mr Bloxham said.
Like HSBC, NAB's economics division has pushed out its start date for the RBA's next hiking cycle to mid-2019.
"With growth continuing to rise over 2018 we expect a decline in the unemployment rate, and wage growth to accelerate to around 2.5 per cent by mid next year, giving the RBA confidence that inflation will move back towards the target band so that it can begin the gradual process of lifting rates from the current low levels," said NAB.
AMP Capital chief economist Shane Oliver is even more dovish about the RBA trajectory, suggesting rates could be on hold until 2020.
"The continuing weakness in home prices in Sydney and Melbourne will depress consumer spending as the wealth effect goes in reverse. It’s consistent with our view that the RBA will leave rates on hold out to 2020," Mr Oliver said.
"Home price weakness is at levels where the RBA started cutting rates in 2008 and 2011, so while it’s not our base case we can’t rule out the next move in rates being a cut rather than a hike," he said.
