According to JPMorgan Chase's model, the Reserve Bank of Australia does not need to tighten policy in the coming months. The model is based on official cash rate data since 1990 and can explain 89.0% of the monthly cash rate changes since 1990.
The model takes into account the impact of core inflation on the cash rate as well as the impact of unemployment and inflation expectations. The equilibrium estimate for the current cash rate of 4.4% is only slightly higher than the current level of 4.35%. JPMorgan also added that the recent rise in inflation is not enough to generate the need for a rate hike.