Bank of America: Inflation momentum slowing down, Australian Reserve Bank expected to stand pat next week

On August 3rd, Jin10 data reported that Bank of America predicts that the Reserve Bank of Australia will keep the interest rate unchanged at 4.35% in the upcoming interest rate resolution next week. Prior to this meeting, the inflation data for the second quarter released earlier this week showed that the potential inflation momentum has slowed down, albeit at a slow pace. Therefore, we expect the Reserve Bank of Australia to acknowledge that the current policy interest rate is reducing price pressure in the right direction. However, the slow progress towards the target may mean that the interest rate will remain unchanged for a period of time. The committee may also emphasize the relative weakness of the consumer sector. We expect no significant changes to the Reserve Bank of Australia's economic forecasts, but there may be slight adjustments after the release of second quarter data. In particular, we expect the Reserve Bank of Australia to slightly raise its year-on-year forecast for the ending mean CPI, but it should return to the target level by 2025. Given the continued relative weakness of the consumer sector, the assumption of a rise may also undergo slight changes.