Reserve Bank governor Phillip Lowe (Image: AAP/Joel Carrett)

Central bankers are generally loath to talk about the future direction in interest rates. But the Reserve Bank (RBA) has been routinely forecasting for the last 12 months that it expects interest rates will rise in 2024 -- but only if wages growth ends "materially higher than it is currently".

For the past three months or so, however, the RBA has also been signalling that the bank’s July policy meeting will see two significant decisions made on other aspects of monetary policy. They are whether “to retain the April 2024 bond as the target bond for the three-year yield target or to shift to the next maturity, the November 2024 bond” and to finish or extend its current quantitative easing program after the current $100 billion in bond purchases ends.

The decision on which month -- April or November, 2024 -- is the more important. The bank has been holding the three-year bond rate at 0.1% for more than a year by buying bonds in April 2024 issues, thereby keeping the price of the bonds high enough for the yield to remain at 0.10%.