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The interest rate futures market overwhelmingly expects the Reserve Bank of Australia (RBA) to lift the official cash rate by 0.25% on Tuesday.
The futures market has also priced in a high probability of two further rate hikes over the next six months, which would take the cash rate to 5.10%.
Given that mortgage payments are already taking a near-record share of household income, the prospect of two to three rate hikes has economists warning that the economy could be pushed into a technical recession next year.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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