RBA raises rates again amid inflation surge. The Reserve Bank of Australia lifted its official cash rate by 25 basis points to 4.35%, marking the third hike this year as it battles persistent inflation. Annual consumer price inflation jumped to 4.6% in March, driven partly by Middle East conflict-related fuel price spikes. The RBA's preferred underlying inflation measure remains at 3.3%, above its 2-3% target band, signaling broad-based price pressures beyond oil. An 8-1 vote approved the increase, with Governor Michele Bullock emphasizing the need to prevent temporary shocks from becoming lasting problems. The hike will add roughly $100 to monthly mortgage payments on average loans. However, the RBA faces a difficult balancing act as economic growth slows and consumer confidence collapses to recessionary levels, creating potential stagflation risks.
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