Australia could be facing another two interest rate hikes before Christmas, and that has one economist worried.

According to The Australian, HSBC chief economist Paul Bloxham has warned that the Australian economy could be heading for a difficult few months.

He believes the Reserve Bank of Australia (RBA) may need to lift rates again, despite signs of slowing growth.

And if he’s right, Aussies could be facing more than just higher mortgage repayments.

With the RBA meeting next Tuesday, his latest outlook gives borrowers and investors plenty to think about.

So, just how worried should Australians be?

HSBC sees recession risk climbing

Bloxham believes the RBA has a strong case to lift interest rates next week, followed by another increase in November.

But he warns that two more hikes could leave the Australian economy struggling to grow around the turn of the year.

He expects economic growth to come close to stalling in the December and March quarters.

That has him putting the risk of a technical recession at close to 50%.

A technical recession occurs when the economy contracts for two consecutive quarters.

For comparison, Bloomberg’s surveyed recession probability over the next 12 months is currently just 20%.

So, why is Bloxham particularly concerned?

He points to Australia’s weak productivity growth, which has left the economy with very little room to expand without pushing inflation higher.

Bloxham believes growth may need to slow considerably, or the economy may need to contract.

He says this could be necessary to bring underlying inflation back to target by late 2027.

Why are more rate hikes expected?

The RBA has already increased interest rates 3 times this year, taking the cash rate to 4.35%.

However, inflation remains above the central bank’s 2% to 3% target.

The latest ABS inflation figures showed annual headline inflation at 3.5% in July, while trimmed mean inflation remained at 3.6%. 

Higher oil prices and global inflation pressures are adding to the RBA’s concerns.

Earlier this week, RBA governor Michele Bullock warned that inflation risks were materialising, although she stopped short of committing to another rate increase. 

Meanwhile, yesterday’s employment report showed Australia’s unemployment rate increasing to 4.6% in August.

Employment rose by 39,500 people, but full-time employment declined by approximately 6,000. 

Those figures suggest the labour market is cooling, but inflation remains a concern.

What happens next?

The RBA will announce its next interest rate decision on Tuesday, 29 September.

But there’s another complication.

August’s inflation figures aren’t due until Wednesday, one day after the board meets.

That means policymakers will have to make their decision without another inflation reading.

The post Could two more RBA rate hikes push Australia into recession? appeared first on The Motley Fool Australia.

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HSBC Holdings is an advertising partner of Motley Fool Money. Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended HSBC Holdings. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It’s another rough Friday on the ASX, and things aren’t looking much better as we head towards the weekend.

The S&P/ASX 200 Index (ASX: XJO) is currently down 0.48% to around 8,659 points, after dropping as low as 8,639.9 earlier in the session.

That’s the lowest we’ve seen the benchmark since 11 June, with the index now down almost 5% over the past month.

And it’s not just a few of the big names dragging the market lower.

At the latest check, 155 stocks in the ASX 200 are falling, while just 39 are moving higher and 6 remain unchanged.

With another RBA interest rate decision coming up on Tuesday, investors have plenty to think about.

So, could things get worse next week?

Oil jumps as bond yields hit 19-year high

Wall Street was fairly quiet overnight, but there was lots happening in oil and bond markets.

The Dow Jones Industrial Average Index (DJX: .DJI) fell 0.31%, while the S&P 500 Index (SP: .INX) slipped 0.02%.

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) managed to finish 0.01% higher.

In addition, the US 10-year Treasury yield climbed to approximately 5.12%, its highest level in 19 years.

Oil prices were also on the move, with Brent crude jumping more than 4% overnight to around US$107.53 a barrel.

Selling spreads across the ASX 200

The selling is pretty widespread today, with 10 of the 11 ASX sectors trading lower.

BHP Group Ltd (ASX: BHP) shares are down 0.66% to $60.62, while Rio Tinto Ltd (ASX: RIO) has slipped 0.88% to $164.99.

Property-related stocks aren’t having a great day either, with REA Group Ltd (ASX: REA) falling 2.51% to $148.27.

However, the big banks are managing to buck the trend and provide some support for the benchmark.

Commonwealth Bank of Australia (ASX: CBA) shares are up 0.28% to $150.405, and Westpac Banking Corp (ASX: WBC) has gained 0.56% to $34.32.

Will the RBA make things worse next week?

All eyes now turn to Tuesday, when the RBA announces its next interest rate decision.

According to The Australian, money markets are pricing a 90% chance of another 25-basis point increase.

This would take the cash rate to 4.60%.

Traders are also pricing approximately 40 basis points of additional tightening by the end of the year.

The RBA has already lifted rates 3 times in 2026, and another increase would add to borrowing costs for households and businesses.

And with the ASX 200 at its lowest level since June, I’ll be watching whether it can hold above 8,600 points.

The post ASX 200 sinks to June lows as investors brace for another RBA rate hike appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Just when Netwealth Group Ltd (ASX: NWL) shareholders thought things couldn’t get much worse, another problem has come their way.

Netwealth shares have plunged 5.72% to $17.47 in midday trade, after falling as low as $17.22 earlier in the session.

The wealth management stock has now lost more than 20% over the past month and is trading almost 50% below its 52-week high of $33.62.

And today’s announcement has given investors another reason to be concerned.

So, what has happened this time?

Netwealth faces class action

The selling follows an ASX announcement confirming that Netwealth is facing a class action over the failed First Guardian Master Fund.

The company revealed that two of its subsidiaries have now been served with a Statement of Claim.

At the centre of the case are First Guardian investment options offered through the Netwealth Superannuation Master Fund.

These were available to adviser-led members from March 2021, before Netwealth stopped accepting new investments in December 2022.

The company says it intends to defend the claim.

According to the release, the allegations cover matters previously addressed through a court-enforceable undertaking with ASIC.

The regulator accepted that undertaking in December 2025 and began Federal Court proceedings over the same issues.

Netwealth also reminded investors that it completed a compensation program in January 2026.

That saw around $101 million paid to affected members, covering the net capital each had invested in First Guardian.

What happened to investors’ money?

There was a lot of money tied up in First Guardian before things went wrong.

Between March 2021 and December 2022, 1,303 Netwealth members invested approximately $128.5 million in the fund.

Then, in May 2024, fund operator Falcon Capital froze withdrawals.

By that stage, around 1,080 members still had approximately $100.7 million invested.

The matter eventually ended up in the Federal Court.

In August, the court found that Netwealth’s subsidiaries had breached the Corporations Act in how they handled the investments.

They hadn’t gathered enough information about First Guardian or made adequate independent checks into the risks involved.

Members also weren’t warned that they might struggle to access their money if the fund became illiquid.

ASIC didn’t seek a financial penalty, pointing to Netwealth’s timely compensation of affected investors.

What’s next for Netwealth shares?

Netwealth has already paid around $101 million in compensation, but it still has another legal battle on its hands.

And there’s still the question of what this latest case could mean financially.

With shares continuing to fall, investors clearly aren’t thrilled about another round of legal proceedings.

Personally, I wouldn’t rush in just because the stock has fallen so far.

The post Why are Netwealth shares crashing 6% on Friday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.