2.9K views
3 days ago
Economists aren't yet forecasting a recession, but the risk of one is also going up, says AMP chief economist and head of investment stragey, Shane Oliver.
Mr Oliver's comments come as oil touched a six-month high on Friday, as hopes of a peace deal in the US-Iran war faded.
US President Donald Trump threatening renewed strikes against Iran after the November midterm elections.
Brent crude neared $US117 a barrel, which eased to around $US115 a barrel on Monday.
That's bad news for the RBA as it mulls a fifth rate hike for the year on Melbourne Cup day.
Market pricing on a November rate hike is 66 per cent. A rate hike fully priced in by February next year.
Mr Oliver says all of this combined means the risks on interest rates are skewed to the upside.
"If you go back a month ago after the last meeting, I was hopeful that maybe we'd seen the worst that rates were at the top and the next move would be a cut, albeit not until sometime in the second half of next year," he says.
"Since then, of course, we've seen oil prices hit higher, we've seen business surveys show a renewed rise in business inflationary pressures and cost pressures, and of course, we've seen more hawkish commentary from the Reserve Bank."
"And those things suggest that there is a high likelihood that we will see another rate hike next week."
#ABCBusiness
Subscribe: http://ab.co/1svxLVE
Note: In most cases, our captions are auto-generated.
#ABCNEWS #ABCNEWSAustralia
