Australia's NAB Revises Interest Rate Forecast Amid Middle East Tensions

Australia's National Bank has updated its forecast, now expecting the Reserve Bank of Australia to raise interest rates consecutively in March and May, reaching a peak cash rate of 4.35%. According to Jin10, this revision comes after previously predicting a single rate hike in May, with a peak of 4.1%. The bank cites robust growth, a tight labor market, and high inflation as factors supporting further monetary tightening. The recent Middle East conflict has introduced new inflationary pressures, prompting the bank to adjust its expectations. Future policy decisions will largely depend on oil price trends and domestic data, with the new baseline scenario presenting bidirectional risks. The bank continues to anticipate a gradual easing of policy from the second half of 2027, returning to a more neutral level.