Goldman Sachs revised their 2018 rate hike call on RBA

In its latest outlook report for 2018, the analysts at Goldman Sachs have revised their 2018 rate hike call on the Reserve Bank of Australia (RBA) from February to May.

Key Quotes:

Goldman Sachs sees two hikes from RBA in 2018.

The market is underestimating both the pace and magnitude of the coming tightening cycle.

The RBA lowering their inflation forecasts in the SoMP last week reduces the urgency to hike ... "buy the RBA sometime".

"Against the backdrop of the fastest 8-month expansion in full-time employment on record, we caution against underestimating the pace at which spare capacity in the economy is being absorbed".