Will interest rates finally rise in 2022? 

 The outlook could be shifting
The Reserve Bank of Australia has ended the year with cautious optimism, despite cases of the COVID-19 variant Omicron growing, setting the scene for a return to more normal monetary policy settings.
With another year defined by the once-in-a-century global pandemic, COVID looks set to stick around for a while yet.
But with vaccination rates soaring, minutes of the RBA’s December meeting, released on Tuesday, showed the central bank is optimistic the latest outbreak is “not expected to derail the recovery” of the national economy.
“The Reserve Bank board will not increase the cash rate until actual inflation is sustainably in the 2–3% target range. We are still a fair way from that point,” Mr Lowe said.
“In our central scenario, the condition for an increase in the cash rate will not be met next year. It is likely to take time for that condition to be met and the board is prepared to be patient.”
But financial markets expect the first rate hike to occur by mid-next year before reaching about 1% by the end of 2022 and 1.75% by the end of 2023. 

In the perspective of Sarah Dowling is realestate.com.au’s Banking and Finance journalist. 

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