Interest rate

At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 3.60 per cent. It also increased the interest rate on ...

The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that. The Board expects that further tightening of monetary policy will be needed to ensure that inflation returns to target and that this period of high inflation is only temporary. Another source of uncertainty is how the global economy responds to the large and rapid increase in interest rates around the world. The Board recognises that monetary policy operates with a lag and that the full effect of the cumulative increase in interest rates is yet to be felt in mortgage payments. At the aggregate level, wages growth is still consistent with the inflation target and recent data suggest a lower risk of a cycle in which prices and wages chase one another. The central forecast is for inflation to decline this year and next, to be around 3 per cent in mid-2025.

The Reserve Bank could hit pause on further rate rises after a final increase next month, but economists say the cash rate will probably go up again in May ...

[Woolies, CBA CEOs say trading is ‘strong’ despite rate rise hits](https://www.afr.com/business-summit/woolies-cba-ceos-say-trading-is-strong-despite-rate-rise-hits-20230307-p5cq2u)As the RBA raised rates again, the CEOs of CBA and Woolworths said spending is strong, and food inflation is persistent, pointing to challenges for the RBA. [Banks on notice from ACCC as interest rates climb](https://www.afr.com/politics/federal/banks-on-notice-from-accc-as-interest-rates-climb-20230307-p5cpyj)Gina Cass-Gottlieb warned the watchdog would look closely at how banks set interest rates as the Reserve Bank continues to fight inflation with ongoing rate rises. [Energy price concerns abate but rate fears increase](https://www.afr.com/politics/federal/energy-price-concerns-abate-but-rate-fears-increase-20230307-p5cpzg)Concern over energy prices has abated, but spiralling interest rates continue to drive the cost of living as the signature concern of voters, according to new research. [9 out of 10 mortgage holders are already cutting back](https://www.afr.com/politics/federal/rising-interest-rates-homeowners-cut-back-on-eating-out-takeaway-20230304-p5cpei)Research by analytics firm Nature revealed that the Reserve Bank’s aggressive interest rate rises to try to tame inflation were having the desired effect. Comyn says this slowdown will be different as customer anxiety mounts](https://www.afr.com/chanticleer/matt-comyn-says-nuance-needed-in-jigsaw-economy-20230306-p5cpv3)The CBA boss says the gap between the anxiety customers feel as rates rise, and their lived experience, shows why banks must remain flexible as the economy slows. [Prospect of rate pause could lift housing market sentiment](https://www.afr.com/property/residential/prospect-of-rate-pause-could-lift-housing-market-sentiment-20230307-p5cq10)But the 10 back-to-back rate rises will continue to put pressure on people’s ability to borrow and repay their mortgage, experts say. [Australian dollar falls after RBA softens tone about rate outlook](https://www.afr.com/markets/debt-markets/australian-dollar-falls-after-rba-softens-tone-about-rate-outlook-20230306-p5cpua)The Australian dollar and bond yields fell after the Reserve Bank indicated higher interest rates ahead, but softened its hawkish stance. “High inflation makes life difficult for people and damages the functioning of the economy. But it means that the board is not convinced that it needs to hike the cash rate multiple times from here,” he said. Reserve Bank’s Lowe takes stock of his inflation-fighting campaign](https://www.afr.com/companies/financial-services/reserve-bank-s-lowe-takes-stock-of-his-inflation-fighting-campaign-20230307-p5cq4b)Reserve Bank governor Philip Lowe recognises that his inflation-fighting campaign has now entered a new and particularly tricky phase, writes Karen Maley. “Despite last month’s hawkishness, data dependence was still there in the guidance. The benchmark was flat at 7328.1 points heading into the meeting.

Home owners will be slugged with another mortgage bill squeeze after the Reserve Bank raised its interest rates for the 10th time in a row.

The RBA wants to see evidence the economy has continued to cool in the new year and that the pace of price growth, particularly for services, is showing signs of easing. With that in mind, Mr Langcake said upcoming data about price growth in the March quarter and the performance of the jobs market over February and March will be crucial to the rate outlook. Luke Hartigan, a lecturer in economics at the University of Sydney, said the RBA is pointing to a “turning point” in inflation, with monthly figures showing the Consumer Price Index (CPI) fell in January. “This change does not preclude the RBA from raising the cash rate more than once from here, but it means that the board is not convinced that it needs to hike the cash rate multiple times more.” Against that backdrop, pressure is growing on the RBA to pause rates and wait for additional data on the economy in the early months of 2023. “The RBA have removed a key hawkish sentence from the February statement, and that is another step closer to the end of their tightening cycle,” he said.

The S&P/ASX 200 Index (ASX: XJ) shot higher after the RBA lifted rates for the tenth consecutive time. Here's what the central bank said.

It expects inflation to be around 3% by the middle of 2025. However, Lowe said, “The outlook for business investment remains positive, with many businesses operating at a very high level of capacity utilisation.” “The monthly CPI indicator suggests that inflation has peaked in Australia. The Aussie economy continues to grow but at a slower pace. Judging by the big afternoon lift-off, ASX 200 investors don’t appear put out by all the uncertainty ahead either. For now, wages are continuing to increase amid high inflation and a tight labour market. That afternoon saw the first rate hike from the RBA since November 2010. “The board expects that further tightening of monetary policy will be needed to ensure that inflation returns to target and that this period of high inflation is only temporary,” Lowe said. “The board, however, remains alert to the risk of a prices-wages spiral, given the limited spare capacity in the economy and the historically low rate of unemployment,” he added. But the ASX 200 looks to be getting a boost from the report that inflation in Australia has at last peaked. [widely expected](https://www.fool.com.au/2023/03/06/what-can-asx-200-investors-expect-from-the-next-rba-interest-rate-decision/) as [inflation](https://www.fool.com.au/definitions/inflation/) in Australia remains well above the central bank’s 2% to 3% target range. Explaining why the board opted to raise interest rates yet again, RBA governor Philip Lowe noted that global inflation remains “very high”.

Australians are bracing for a tenth consecutive interest rate rise as the Reserve Bank of Australia meets ...

[Inflation rose 7.4 per cent in the 12 months](https://www.9news.com.au/finance/australia-monthly-inflation-figures-january/227aa454-d73e-4d9b-be64-fbd45b14dfb0)to January 2023 - down from the 8.4 per cent rise in December 2022. Economists are today predicting another rise of 0.25 per cent which will bring the official cash rate to 3.6 per cent. Since May 2022 - after interest rates started rising from the historically low 0.10 per cent - repayments on a $750,000 loan will increase by an extra $1500 a month if the central bank hikes the rate today. [25 basis points in February to 3.35 per cent.](https://www.9news.com.au/finance/australia-interest-rates-february-2023-decision-how-much-it-will-cost-you/01e6edde-5d84-4c0a-ada9-a1dd760b9a75) [interest rate](https://www.9news.com.au/interest-rates)rise as the [Reserve Bank of Australia](https://www.9news.com.au/reserve-bank-australia)meets later today. The central bank hiked the cash rate by

Recent data on inflation, employment, spending and manufacturing show a hotter economy than officials expected, the central bank chair told Congress on ...

Elizabeth Warren (D-Mass.) asked Powell what he would say to millions of people who could be out of work if the Fed keeps raising rates and causes a downturn. In a shock to observers, the unemployment rate fell to 3.4 percent, a low not seen since May 1969. Whether that can keep up as borrowing costs climb higher and higher remains to be seen. For much of last year, the Fed sprinted to catch up to inflation that soared to 40-year highs, hiking interest rates by 4.5 percentage points in less than a year. But Democrats have raised alarms that high rates could dampen the economy so much that workers lose their jobs and people pull back on spending. Officials have argued that smaller, quarter-point increases give them more flexibility as they tiptoe up to the federal funds rate’s ultimate level. The plan then was to stick to a few more quarter-point increases until pausing rate hikes altogether, so the full weight of the Fed’s decisions last year could work through the economy. “Powell’s comments make it sound as though they need to be convinced not to speed the pace up,” Tang wrote. Democrats have warned the Fed against going too far and causing such a slowdown that business announce widespread layoffs and workers suffer. The expectation is that there will be notable revisions since the last set of projections, from December, including in where interest rates will eventually settle. And next week, a new inflation report will help explain whether progress on the Fed’s inflation fight is slowing. They also mark a clear signal from the economy’s most powerful policymaker that the Fed would consider sharper interest rate hikes if officials thought the economy was moving in the wrong direction.