Rapid interest rate rises unlikely

The Australian Financial Review has reported that financial markets have lowered their expectations for interest rates rises, amid renewed concerns about the sustainability of the global economic recovery.

The market is currently factoring in 1.63% of rate increases over the next 12 months, down from 1.87% a week ago.
The RBA indicated that it felt there was less cause for further interest rate reductions in the minutes from its August policy meeting, providing the economy contunied to recover, however it also warned that there was a risk to our economy should confidence be jeopardised - signaling to most economists that it was in no rush to raise rates.

"This is not the environment you would be expecting rapid-fire rate rises given some of the concerns the Reserve Bank has about the outlook for household spending in the second half," CBA chief economist Michael Blythe said.

ANZ senior rate strategist Tony Morriss said the RBA would wait until the March quarter next year to raise rates.