Two more interest rate hikes to come, says State Street strategist | ABC News

State Street’s senior strategist Clive Maguchu says the RBA will deliver rates increases in November and February, which will take the cash rate to 5.1%. Clive Maguchu says consumers need to get used to higher interest rates in general

“It’s definitely a paradigm shift. I think that lower rates are gone for now. I think it’s going to be a higher rate environment. There are many factors. I think inflation is definitely one of those factors, but these higher government debt levels that we’re seeing globally and this AI related financing that’s required, I think has raised the general level of interest rates. And I think that’s the reality for the next couple of years,” he said.

Clive Maguchu says the higher rate environment will result in sluggish growth, but he’s not sure about a recession yet. He says, “it will be nine to 12 months before we see some relief ” from the peak of interest rates and the RBA changes its tone and considers rate cuts.

Retail stocks took a hit this week as higher interest rates result in softer consumer spending outlook. Coles Group shares fell 7.8% on Friday. The broader market managed to finish the week higher with the ASX 200 booking a gain of 1.3% at 9,025.

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