NAB Says RBA QE to End February 2022

By Sophia Rodrigues

National Australia Bank economists expect the RBA to end its bond purchase program (QE) by February, making it the first major bank to make a call for an end as early as February.

NAB economists have brought forward their RBA rate hike call to mid-2023 from 2024 forecast earlier. They also expect the RBA to drop the 10bps April 2024 bond target (they call it YCC) at next week's board meeting.

"The lack of the RBA’s commitment to the YCC target this week suggests the RBA will end YCC at next week’s November Board Meeting, which by extension will also include updated forward guidance by the RBA and require an upgrade for the inflation outlook included in the new set of staff forecasts released in the November SMP," NAB economists led by Alan Oster wrote in a note.

NAB's rationale for end of QE by February 2022 is that there is little use for the policy with most other central banks ending or tapering their QE programs.