On Tuesday the Reserve Bank of Australia opted to keep the cash rate on hold at a record low of 1.5% for yet another month.
Governor Phillip Lowe once again stated his belief that low interest rates were supporting the Australian economy and expects gradual improvements in unemployment levels and inflation.
As such, the central bank "judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time."
Incredibly, this was a joint-record 17th consecutive meeting that the central bank has held rates.
When will the RBA lift the cash rate?
It looks likely that the Reserve Bank will smash its existing record and keep rates on hold until early in 2019 at least in my opinion.
Unless something unexpected happens between now and the end of the year, I just don't believe inflation will be strong enough to warrant an increase.
I'm not alone in this view, here's what economists are predicting:
Bill Evans from Westpac Banking Corp (ASX: WBC) stated that "Westpac is not surprised to see the Bank more cautious on the growth outlook and we continue to expect that the cash rate will remain on hold in 2018 and 2019."
Shane Oliver from AMP Limited (ASX: AMP), courtesy of Allure Media, has said that "we have been expecting a rate hike later this year, but the risks are increasing that the RBA won't start raising rates until sometime in 2019."
A statement out of Commonwealth Bank of Australia (ASX: CBA) is a little more dovish that the rest and expects "the RBA to leave the cash rate at 1.5% until November."
And finally, National Australia Bank Ltd. (ASX: NAB) has earmarked a hike to 1.75% in December 2018, followed by a further hike to 2% in June 2019.
