RBA interest rate

Treasurer Jim Chalmers has responded to calls for a major overhaul of the Reserve Bank as interest rates soar to ten-year-high.

“My job is to make sure the Reserve Bank has the best institutional arrangements to do its job the best it can.” Treasurer Jim Chalmers has responded to calls for a major overhaul of the Reserve Bank as Treasurer Jim Chalmers has backed RBA governor Philip Lowe as the right man for the job as homeowners grimace over the eighth interest rate hike.

The Reserve Bank of Australia lifts interest rates by 0.25 of a percentage point, taking the cash rate target to 3.1 per cent.

We continue to look for 50 basis points of rate cuts in the fourth quarter of 2023." The average is only 1.73 per cent — that's half of the best rate," he said. "I don't think it's right. "Given this change was not made we ... "The best base rate in the market at the moment is 3.5 per cent. now see a peak of the cash rate of 3.35 per cent to be reached in February 2023," he noted. "The risk sits with a peak in the cash rate of 3.6 per cent, although further tightening in 2023 is not 'locked in'. "We expect domestic demand to soften in the first half of next year, driven by a slowdown in household spending," he noted. "The size and timing of future interest rate increases will continue to be determined by the incoming data and the board's assessment of the outlook for inflation and the labour market." If passed on in full, the December rate increase will add around $75 to the monthly repayments of a household with a $500,000 mortgage debt on a 25-year term. It was the bank's eighth straight rate rise since it started lifting the cash rate from a record low of 0.1 per cent in early May. The Reserve Bank of Australia (RBA) lifts interest rates by 0.25 of a percentage point, taking the cash rate target to 3.1 per cent.

The full effects of the eight consecutive increases in the Reserve Bank's cash rate are yet to become apparent, and there are signs inflation is on the way ...

But for some time now it has also been calculating inflation [monthly](https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/monthly-consumer-price-index-indicator/latest-release), using a smaller survey that seems to give a pretty good indication of what the larger survey is about to show. Accommodation (up 64% after years in which it was hard to travel) is the only big exception. But he says if 70% of the quarterly measure is cooling down, “that has to be a positive sign”. From time to time, Reserve Bank officials talk about the idea of a “pause”. The two line up, except that in recent months the monthly measure has been sliding. Pay per worker will have climbed 4.7%. But, as it happens, the bank is unlikely to increase rates again for a further two months. For fixed-rate borrowers, things are worse. [12.4%](https://www.abs.gov.au/statistics/economy/business-indicators/business-indicators-australia/sep-2022) in the three months to September, led down by profits in retail (-6%), manufacturing (-21%) and finance (-43%). AMP chief economist Shane Oliver has counted the number of occasions they have referred to the prospect of a “pause” in public pronouncements in the past month. [one-quarter](https://markets.businessinsider.com/commodities/wheat-price/usd?op=1) to [one-third](https://tradingeconomics.com/commodity/crude-oil) from their peaks in the middle of the year, undoing much of what has been driving inflation. [too high](https://www.rba.gov.au/media-releases/2022/mr-22-41.html)” and that the bank expects to increase rates further, although it is “not on a pre-set course”.