RBA

Taken from 63-year-old legislation, it states that the RBA has a duty to contribute to the stability of the currency, full employment and the economic ...

So let’s give it the room it needs to be unpopular when it needs to be. The RBA cannot be all things to all people. It also suggests the bank can be all things to all people. For those who communicate RBA actions to clients and the public, such as financial journalists and market and commercial economists such as me, in columns like this, there should be full transparency. Taken from 63-year-old legislation, it states that the RBA has a duty to contribute to the stability of the currency, full employment and the economic prosperity and welfare of the Australian people. It implies the RBA won’t do anything to make anyone worse off.

The Reserve Bank of Australia is expected to raise interest rates by 0.5 per cent on Tuesday in a battle to beat soaring inflation.

the impact on people from decisions that are made. “I do have confidence in the RBA and I think it‘s appropriate that the government allow the RBA to do its job,” the Prime Minister said on Monday. “My message is the same, of course they (the RBA) have to bare in mind … “Instead of jawboning down wages, (RBA governor) Philip Lowe should be jawboning down corporate profits and heaping pressure on the government to do something about (inflation).” The Reserve Bank of Australia is expected to raise interest rates by 0.5 per cent on Tuesday in a battle to beat soaring inflation. “Given the strength of inflationary pressures, we think the RBA will want to take the cash rate some way above what it thinks is the bottom of the neutral range.”

Local shares have started the day higher, despite heavy losses on European markets overnight and a widely-anticipated interest rate hike by the Reserve Bank ...

The news stoked fears of a recession in Europe, with businesses and households hurt by sky-high energy prices. It's also under pressure to slow the economy down without causing too much pain for businesses and households. The 100,000 barrels per day (bpd) reduction by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) amounts to only 0.1 per cent of global demand. "It's the symbolic message the group wants to send to the markets, more so than anything," said Oanda analyst Craig Erlam, adding that the 100,000 bpd raised last month by OPEC+ was not seen as a big deal. "The bigger picture is that OPEC+ is producing well below its output target and this looks unlikely to change, given that Angola and Nigeria, in particular, appear unable to return to pre-pandemic levels of production," Capital Economics' chief commodities economist, Caroline Bain, said. The European Central Bank (ECB) meets later this week and is expected to deliver its second big rate hike in an attempt to combat inflation, which is running at more than four times its 2 per cent target. And Finland's Economic Affairs Minister, Mika Lintilä, warned of the possibility of "kind of a Lehman Brothers" effect on the energy industry, referring to the 2008 collapse of what was then the fourth-largest US investment bank. "Sky-high energy prices, the risk of gas shortages and the fiscal and regulatory response will shape the outlook for euro zone GDP and inflation much more than anything the ECB may do with rates," Berenberg chief economist Holger Schmieding said in a client note. However, Germany's DAX was down 2.3 per cent on the day. European gas prices jumped as much as 30 per cent as the market opened. The ASX 200 index was up 0.5 per cent, to 6,887 points, by 10:55am AEST. This would bring the new cash rate to 2.35 per cent, its highest level since December 2014.

We are a resources superpower. We can be a renewable energy superpower. Australian metals and minerals will make this happen," said the PM.

Base metals were mixed yesterday – aluminium and lead fell by as much as 0.6% while other metals rose. A rate rise of that size would bring the cash rate to 2.35%, its highest level since December 2014. We can be a renewable energy superpower. “We are a resources superpower. Automakers fell by 4.8% but energy stocks rose by 2.2% in response to higher oil prices. “And as we work with other nations to reduce emissions globally, we will continue to be a reliable provider of energy.” ASX futures were up 0.1% to 6,840 points early this morning. “In the same way, Australia will continue to be a trusted and stable supplier of energy and resources to our key trading partners. “Here – and around the world – your work will drive the global transition to a low-carbon future. “I want to emphasise that our government will continue to work with your businesses to reduce emissions in a predictable and orderly way, underpinning the transition with certainty,” the PM said. Gas prices in Europe jumped by as much as 30% at the start of yesterday’s trade and Germany’s plans to exit nuclear energy by the end of the year seemed to be in jeopardy as it looked to shore up all its power options. What’s more, with the exception of a handful who believe the RBA is about to start softening the blows by reverting to the more typical 0.25% rise, most market watchers believe the hike will once again be in the vicinity of 0.5%.

Are you a borrower? Here's when Westpac Banking Corp (ASX:WBC) is expecting the RBA to stop raising the cash rate...

This second stage of the tightening process, with consecutive 25 basis point increments, is expected to extend out to February next year with the rate peaking at 3.35%. Chief Economist, Bill Evans, commented: “We are confident that the Board will decide to raise the cash rate by a further 50 basis points to 2.35%.” According to the latest Westpac Weekly [economic report](https://www.westpac.com.au/docs/pdf/aw/economics-research/WestpacWeekly.pdf), its team are expecting the central bank to raise the cash rate to 2.35% today. [cash rate futures](https://www2.asx.com.au/markets/trade-our-derivatives-market/futures-market/rba-rate-tracker), the market has priced in an 83% probability of a 50 basis points increase in the cash rate to 2.35%. What is the market expecting the RBA to do? Later today, the Reserve Bank of Australia is meeting to decide on the cash rate again.

Australian shares are set to open higher though the focus will be clearly on the Reserve Bank's rate decision at 2.30pm AEST. Wall St closed for a holiday.

NAB “expects the fourth successive 50bps interest rate increase to be announced on Tuesday as the RBA moves policy back to a more neutral level. Barclays: “We expect the RBA to slow its hiking cycle by increasing rates by 25bp, following three consecutive 50bp hikes. A cash rate of 2.35 per cent is near the RBA’s estimate of the neutral rate, of ‘at least 2.5 per cent’. Does the RBA strengthen its language/resolve to get on top of inflation by removing ‘even keel’ or ‘path to achieve this balance is a narrow one and clouded in uncertainty’. The result is what we now have: a rolling recession hitting different sectors of the economy at different times; we expect it to bring inflation down without precipitating an economy-wide downturn.” We would expect these ‘outsized’ 50bp hikes since June to give way to 25bp moves at some point. The neutral rate is like coasting in a car, it is the rate at which monetary policy is neither providing additional stimulus to the economy, nor acting as a brake on growth.” expects the RBA to deliver its fourth consecutive 50bp hike overnight. Or does the RBA signal a more prolonged hiking cycle but highlights a step down in the pace of rate hikes? TD Securities: “A 50bps hike is consistent with prior RBA hikes and in line with firm data outcomes. This would take the cash rate to 2.35 per cent. In a note, market strategist Ed Yardeni said he sees the potential for what he calls “immaculate disinflation” in the US.

Shares in the Asia-Pacific traded mixed at the open on Tuesday ahead of the Reserve Bank of Australia's rate decision.

[Brent crude](https://www.cnbc.com/quotes/@LCO.1) futures slipped 0.66% to $95.11 per barrel after climbing nearly 3% on Monday. [CNBC Pro subscribers can read more here.](https://www.cnbc.com/2022/09/06/wall-street-pros-on-adding-cash-to-your-portfolios.html) The While the actual impact on FX liquidity is small … this cut serves as a strong policy signal that the PBOC is uncomfortable with the rapid depreciation of the currency," analysts at Goldman Sachs Economics Research wrote in a note late Monday. crude](https://www.cnbc.com/quotes/@CL.1) [extended gains from the previous session,](#107113820-UoSpkEvIG) while [Brent crude](https://www.cnbc.com/quotes/@LCO.1) declined slightly. [CNBC Pro subscribers can read more here.](https://www.cnbc.com/2022/09/06/analyst-says-buy-this-tech-etf-for-a-long-term-growth-story.html) [OPEC and its allies agreed to a small production cut](https://www.cnbc.com/2022/09/05/oil-opec-surprises-energy-markets-with-a-small-production-cut.html). [S&P/ASX 200](https://www.cnbc.com/quotes/.AXJO) was little changed. [Australian dollar](https://www.cnbc.com/quotes/AUD=) was slightly stronger at $0.6809 in morning trade. [Kospi](https://www.cnbc.com/quotes/.KS11) in South Korea rose 0.14% and the Kosdaq gained 0.43%. [Nikkei 225](https://www.cnbc.com/quotes/.N225) slipped 0.17% and the Topix index lost 0.3%.

While an independent review of the central bank is appropriate, it should avoid breaking what has been a successful inflation-targeting framework over the ...

In terms of the recent inflation outbreak, the RBA is not alone in failing to foresee it. Let’s not forget that the 1970s, a period of multiple supply shocks and high inflation, was also a key trigger for the adoption of inflation targeting in the first place. But a more formal mechanism for fiscal and monetary policy co-ordination ought to be considered, perhaps through a greater role and mandate for the Parliamentary Budget Office. These questions are particularly pertinent to the undershooting of the inflation target from 2015 to 2020. Should the inflation target be the only objective, keeping in mind it is a flexible target? As legislated in the 1959 RBA Act, it is three-pronged, specifying that policy is set with price stability, full employment and the “welfare” of the Australian people in mind.

Aussie homeowners have been slugged with a fifth interest rate rise in a row, which could cost households an extra $1000 a month.

The housing markets in Sydney and Melbourne are suffering. The RBA lowered the cash rate to 0.1 per cent at the end of 2020 amid the Covid-19 pandemic – the lowest it had ever been – and throughout the pandemic said they didn’t plan on raising the cash rates until 2024. Since then, they have averaged 3.93 per cent. “The rapid pace at which the RBA has tightened policy, overlaid with a full appreciation of the lags between rate hikes and the cash flow impact on a home borrower, means there‘s a degree to which the RBA board is flying blind,” In the last quarter, transport costs rose 13.1 per cent as the price of fuel rose to record levels for the fourth quarter in a row. “It has simply been too early for the spending data to pick up the impact of the already delivered rate hikes.” “The level of interest rates will be a key factor of housing market conditions and the pace and depth of home price falls in the period ahead.” Mr Oliver has predicted that the cash rate will peak at 2.6 per cent by the end of the year. On top of that, Australia’s 2.35 per cent cash rate is the highest level it’s been since 2014. Now, the average repayment on a $800,000 mortgage is set soar to more than $4300 per month, an increase of $1000 from April, when the cash rate was at a record low of 0.1 per cent. And with the RBA passing another 0.5 per cent increase for September on Tuesday, Australia is now caught in the throes of its most rapid tightening cycle for more than two decades. That takes the cash rate from 1.85 per cent to 2.35 per cent.

The Reserve Bank has just raised its key interest rate to 2.35%, with the 50 basis point increase in line with most economists' expectations.

I thank the member for Clark for his question because he knows there’s never been harder, never more expensive to see a doctor than it is right now in Australia and is no mystery why, Mr Speaker. That task force, that fund also sits on top of our commitment to rollout 15 urgent care clinics, bulk billed including three in the member’s state of Tasmania, next year. that is why strengthening Medicare was the centrepiece of the Labor government[’s election commitment]. We remember, Mr Speaker, that we managed to block his original radical plan to impose a GP tax on every single Australian going to the doctor, but he was determined … The most pressing thing that we can do in the economy is to responsibly deal with people’s costs of living pressures in a way that delivers an economic dividend. Andrew Wilkie gets the next crossbench question and it is to Mark Butler, the minister for health. I say this to those opposite – if we had a tax on stupid questions asked by the member for Hume we could pay off the deficit in one hit. Whatever rate you’re able to wrangle, though, is likely to be well shy of inflation (which was about 6.1% for consumer prices and 4.9% for the “underlyingrate” in the June quarter, and both will be higher now). The floor of our house was rammed earth, the roof was leaky and our toilet was just a hole in the ground,” he said in his speech. I am aware of this because it came to light under the previous government, it was an issue at estimates we did ask some questions about, some of the issues you avert to were raised in the context of preparing for that estimates round. but I also think that Australians are entitled to believe someone in the incredibly powerful and I might add incredibly well-paid position that Dr Lowe occupies. as the honourable member knows, the tax cuts that are legislated by a former parliament come in around [July 2024].

Since the RBA started lifting rates in May, the cumulative increase in repayments is now more than $1000 a month on an $800000 loan.

Compared to the pre-pandemic period, household spending was up 11.9 per cent on July 2019 levels. Spending by households in July was 18.4 per cent up on the same month last year. “The [bank] board expects to increase interest rates further over the months ahead, but it is not on a pre-set path,” he said. “There are widespread upward pressures on prices from strong demand, a tight labour market and capacity constraints in some sectors of the economy.” Beyond that, some increase in the unemployment rate is expected as economic growth slows,” he said. The preconditions that Philip Lowe set for increasing rates have not been met.” [Inside Politics newsletter here](https://www.smh.com.au/link/follow-20170101-p5apym). Following its monthly meeting on Tuesday, the RBA increased the cash rate to a seven-year high of 2.35 per cent. The move, expected by markets and economists, will add $242 to the monthly repayments on an $800,000 mortgage. This will put more pressure on a lot of Australians who are already stretched.” Expenditure across all categories was up. “This will tighten the screws on family budgets.