Westpac's economic team had been forecasting a couple more rate rises from the Reserve Bank, which would have taken the cash rate to a peak of 4.1 per cent.

However, the combination of a change in the RBA governor's language, some weaker domestic data and, most importantly, the changing global financial landscape have prompted a change in view.

The bank's veteran chief economist Bill Evans published a note today forecasting no rate move at the RBA's April meeting before one more 0.25 of a percentage point hike in May, which would take the cash rate to a peak of 3.85 per cent.

Remember, that's up a whopping 3.75 percentage points from where it was at the start of May last year, in the fastest string of rate hikes since Australia made its central bank independent from government.

The outlook for the US banking sector, economy and its effect on the Fed's interest rate decisions is key to the change in view.

"As we write, the most realistic risk scenario for the US economy involves a credit squeeze from regional banks (generally those with assets below $US250 billion, and that are not subject to the strict Dodd–Frank regulations, having been exempted following active lobbying of the Trump government in 2018).

"As markets, regulators and rating agencies restrict the capacity of these smaller banks to support SMEs and small business (around 50% of total market coverage) a new drag will emerge for the US economy.

"This is also likely to undermine confidence and raise some questions about the stability of the global banking system.

"Wildly gyrating markets are highlighting the uncertainty around this scenario."

With that in mind, Westpac expects the US Fed to raise rates just once more, next week, by 0.25 of a percentage point, not half a percentage point as had previously been tipped.

Mr Evans is of the view that the RBA will take a cautious approach in light of global uncertainties.

"Even if the markets settle by the time of the RBA's April board meeting there will be sufficient uncertainty for a prudent board that was already clearly open to a pause to take that option."

Financial market traders generally agree that the RBA will pause next month, with that priced in as a 99 per cent near certainty.

The other 1 per cent leans towards the possibility of a rate cut.

However, Mr Evans thinks that, if the banking turmoil settles down, the March quarter inflation figures released in late April will give the RBA an excuse to lift rates one more time in May.