Interest rates

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”.

Federal Reserve Chairman Jerome Powell on Tuesday cautioned that interest rates are likely to head higher than central bank policymakers had expected.

However, he also noted "there is little sign of disinflation" when it comes to the important category of services spending excluding housing, food and energy. Markets mostly had expected the Fed to enact a second consecutive quarter-point, or 25 basis points, rate increase at the Federal Open Market Committee meeting later this month. "Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time," Powell said. "We're taking the only measures we have to bring inflation down," Powell said. "We have covered a lot of ground, and the full effects of our tightening so far are yet to be felt. The Fed has raised its benchmark fund rate eight times over the past year to its current targeted level between 4.5%-4.75%. "The historical record cautions strongly against prematurely loosening policy. The chairman faced some pushback from Democrats on the Senate panel who blamed inflation on corporate greed and price gouging and said the Fed should reconsider its rate hikes. Elizabeth Warren, D-Mass., a frequent Powell critic, charged that the Fed's inflation goals will put 2 million people out of work. On its face, the funds rate sets what banks charge each other for overnight lending. That's well above the Fed's 2% long-run target and a shade past the December level. "If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes."

Powell tells Congress the Fed could raise interest rates more than planned to tame inflation. Price increases and job growth have surged lately.

"You claim the only solution (to inflation) is to lay off workers," she said. "There is a job for us to do in better aligning demand with supply," he said. He conceded the Fed's mandate is to promote both full employment and low inflation. Not when we have the lowest unemployment in 54 years." Elizabeth Warren, D-Mass., said inflation chiefly has been caused by supply troubles, the war in Ukraine and corporate greed, rather than a surge in consumer and business demand that the Fed can dampen with higher borrowing costs. And he said that “from a broader perspective, inflation has moderated somewhat since the middle of last year.” And based on past experience, the ripple effects of those 2 million cuts will likely lead to another 1.5 million layoffs, Warren said. But several committee Democrats told Powell the benefits of higher rates aren't worth the cost. Most economists expect the sharp rate increases will tip the economy into a recession this year. But inflation picked up from 5.3% in December and the monthly increase accelerated sharply. “Although nominal wage gains have slowed somewhat in recent months, they remain above what is consistent with 2% inflation and current trends in productivity. But in January, the economy added a blockbuster 517,000 jobs.

With interest rates this week hitting 3.6 per cent and the big four banks as eager as ever to pass rate increases on immediately, many households are ...

Remember, the last time the cash rate sat at 2.5 per cent pre-Covid was 2014. While it is crucial to do the numbers and ensure your budget can handle further rate rises, with rents increasing and demand for rental properties guaranteed to escalate, you really can’t go wrong. It may well be that you have to take your business elsewhere. Every housing market is different but I think some of the It’s entirely possible the RBA With interest rates this week hitting 3.6 per cent and the big four banks as eager as ever to pass rate increases on immediately, many households are feeling the heat.

Australian mortgage holders have been hit with fresh financial pain following the Reserve Bank of Australia's tenth consecutive cash rate hike.

Westpac, NAB and ANZ all expect the rate to peak at 4.1 per cent in May. “The government needs to wake up and take action to save renters and mortgage holders from being smashed by the RBA’s dogmatic interest rate rises. Westpac expects the rate to drop to 2.35 per cent by December 2025, NAB expects it to drop to 3.1 per cent by May 2024 while ANZ forecasts a drop to 3.85 per cent by November 2024. The Greens slammed the increase, saying it is “a clear indication that the central bank is out of control and needs to be reined in”. Post jobs and search for local talent on “The RBA itself has found that inflation is being primarily driven by supply side shocks and corporate profiteering, and has admitted that there is very little that monetary policy can do to offset supply shocks.” “The RBA’s response to a problem it doesn’t understand with a solution that doesn’t suit is a form of institutional madness,” Greens Economic Justice spokesperson Senator Nick McKim said. “The Board is seeking to return inflation to the 2–3 per cent target range while keeping the economy on an even keel, but the path to achieving a soft landing remains a narrow one.” The monthly CPI indicator “suggests that inflation has peaked in Australia”, Lowe said, but the RBA is still seeking to return it to the central bank’s target of 2-3 per cent. “The board’s priority is to return inflation to target,” he said. The RBA adjusts the cash rate in an attempt to rein in inflation, which most recently was reported to be 7.4 per cent in the 12 months to January. The RBA on Tuesday handed down a 0.25 per cent increase to the official interest rate, bringing it to 3.6 per cent.

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.

[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. 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. ](https://www.afr.com/companies/retail/leah-weckert-to-take-top-job-at-coles-as-steven-cain-retires-20230220-p5cm27)However, the pain would hit small businesses first, she warned. [Start of the end for RBA rate rises after 0.25pc rise](https://www.afr.com/policy/economy/rba-lifts-rates-to-3-6pc-flags-at-least-one-more-increase-20230307-p5cpy1)The Reserve Bank could hit pause on rate rises after a final increase next month, but economists say the cash rate will probably go up again in May unless more evidence emerges that inflation and the jobs market are cooling. Connect with Hannah on [[email protected]](mailto:[email protected]) [Gus McCubbing](/by/gus-mccubbing-p5367e)is a journalist at the Australian Financial Review in Melbourne. [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. 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. One of their biggest headaches is the rapidly increasing price of chicken, which Mr Ear said was up by between 30 per cent and 40 per cent. “These results are precisely in line with what the RBA is trying to achieve through its monetary policy.

In light of recent strong data, Jerome H. Powell said that the Federal Reserve is likely to raise rates higher than expected.

“I would explain to people, more broadly, that inflation is extremely high, and that it is hurting the working people of this nation badly,” Mr. “We are taking the only measures that we have to bring inflation down.” Powell responded that the central bank is doing what policymakers believe is necessary. “Indeed, it suggests that we still have work to do.” “The process of getting inflation back down to 2 percent has a long way to go and is likely to be bumpy,” Mr. Still, he underlined that “there is little sign of disinflation thus far” in services outside of housing, which includes purchases ranging from restaurant meals to travel and manicures. It is also seen as a precursor to the economy slipping into a downturn When this measure of the so-called yield curve inverts it suggests that investors are more worried about the economy in the short term and want to earn higher returns for investing in U.S. And consumers who are earning more may have more ability to sustain their spending, keeping demand strong enough to allow price increases to persist. “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.” That initially seemed to be slowing consumer and business demand and helping inflation to moderate. After he delivered his opening testimony, investors increasingly bet that the central bank would make a half point move and stock prices lurched lower.

I've calculated this increase in payments — which amounts to $12,960 per year — by comparing payments on the National Australia Bank's base variable mortgage ...

He has six months left to get his house in order. He had been handed the keys to a car in working order. UK inflation has been falling for three months, from 10.1 per cent to [9.1 per cent](https://tradingeconomics.com/united-kingdom/inflation-cpi). One of the reasons wages aren't yet climbing particularly fast is that (unusually) wage earners expect inflation to fall. It might mean going harder for longer on interest rate rises than he otherwise would to get things in order. At the moment it is pointing to lower inflation. This implies it isn't yet reassured by the official figures and that it's liaison program with 600 or so business operators has identified increases yet to come. After nine Reserve Bank hikes, ahead of Tuesday's meeting, it was [5.24 per cent](https://www.nab.com.au/personal/home-loans/offers). It's what his predecessor did for him in August 2016. But buried in the fine print was something worse. Asked whether now was a good time to buy a major household item, only 17 per cent of Australians surveyed said yes. That's a reference to the large number of borrowers who are about to be hit with higher payments as they come off low fixed rates.

The Federal Reserve chairman made clear that he's willing to press interest rates both higher and at a faster pace if needed as the US central bank reacts ...

Allianz Investment’s Charlie Ripley: “[The] reality is that he is largely affirming what the bond market has already priced in. That should push inflation down a little more quickly than the Fed anticipates. Nevertheless, there is no question that Powell opened the door to a 50 BP hike in March.” Santander’s Stephen Stanley said he likened today’s statement to Powell’s Jackson Hole speech in August: “It is short and to the point. “At this time, I am sticking to my call for a 25 BP rate hike on March 22. The S&P 500 fell 1.5 per cent to 3986.

The Reserve Bank has delivered its 10th consecutive interest rate rise as it continues its battle to bring inflation under control.

[Shane Wright](/by/shane-wright-h170pw)– Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.Connect via You need to actually be active and on the front foot for growth. “You can never skate through, and that’s part of my message today. It is a record 10th consecutive meeting where the cash rate, which was just 0.1 per cent at the start of May last year, has been increased. On a $604,000 mortgage, Tuesday’s increase will add almost $100 to monthly repayments. “The detail suggests a slowing in services and non-food retail spending is more than offsetting a lift in food retail and hospitality.” “For that to occur, we’d need to see inflation show meaningful signs of improvement in April and then July – the next two quarterly inflation releases – along with some softer results from the monthly inflation measure.” “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,” he said. “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,” he said. Inflation “The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.” “In assessing when and how much further interest rates need to increase, the board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market.

Raising borrowing costs is one mechanism to slow price increases in the wider economy. "The latest economic data have come in stronger than expected, which ...

"The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated," Mr Powell said in Congress during the first of two days of testimony on the economy. "If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," he added. He said that could push the bank to lift rates above the 5% to 5.5% officials had forecast in December. While that is lower than it was, it remains far higher than the 2% rate considered healthy, and Mr Powell said officials have been worried by recent data suggesting that progress could be stalling. The head of the US central bank has warned that officials could raise interest rates farther and faster than previously expected in order to stabilise prices. Inflation - the rate at which prices rise - in the US stood at 6.4% in January.

Ahead of a closely watched speech by Reserve Bank governor Philip Lowe on possible further hikes, Dr Jim Chalmers said the increase had put further pressure on ...

Analysts have speculated the evolution from "further interest rate increases" at the February meeting to "further tightening of monetary policy" in March suggests the bank is softening its rhetoric in preparation for a pause. But he said Australia was in a better position than other advanced economies due to high employment levels, wage growth that's "still not too high", and the large share of variable rate mortgages, which are sensitive to interest rate movements. "We also discussed that, with monetary policy now in restrictive territory, we are closer to the point where it will be appropriate to pause interest rate increases to allow more time to assess the state of the economy." "At our board meeting yesterday, we discussed the lags in monetary policy, the effects of the large cumulative increase in interest rates since May and the difficulties that higher interest rates are causing for many households," he said. In a speech following the 10th consecutive interest rate rise to counter high inflation, RBA governor Philip Lowe said the "more recent rate increases" had moved interest rates into restrictive territory, which is where monetary policy is high enough to slow growth in the economy. The head of the Reserve Bank says interest rates are now in restrictive territory and the bank has an open mind about pausing interest rates at the next meeting.

As expected, the Reserve Bank of Australia (RBA) on Tuesday lifted the official cash rate (OCR) another 0.25 per cent to 3.6 per cent.

And if the RBA continues to tighten, it risks plunging the economy into a consumer-led recession. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs. It will depend on the incoming data. Finally, the RBA “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”. The RBA appears less concerned around inflation, noting that “the monthly CPI indicator suggests that inflation has peaked in Australia” and ”the central forecast is for inflation to decline this year and next, to be around 3 per cent in mid-2025”. In the February Statement, the RBA said that “the Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target”.

Governor Philip Lowe addressed the Australian Financial Review's Business Summit this morning and forecast...

"If we can successfully navigate that narrow path, inflation will return to target in a reasonable time." "The Reserve Bank Board is navigating a narrow path," he said. "This is one reason why the Reserve Bank is determined to ensure that this current period of high inflation is temporary," he said. Lowe reiterated the fact the bank is walking a difficult path between doing enough with changing rates to control inflation without leading Australia down the "narrow path" of a recession. "Inflation is still too high and while it looks to be on a declining path it is likely to remain higher than target for a few years," he said. Lowe said the board remains certain further interest rate rises will be necessary in the future as inflation remains out of target but the bank is waiting to see the outcome in the lag of laying down the increases.

A glimmer of hope the Reserve Bank could soon put the brakes on its aggressive rate hike cycle will be cold comfort for borrowers struggling with the cost ...

“People do pay a lot of attention to the words in these statements for understandable reasons. “About one-in-five Australians are reaching out for help. That makes interest rates go up higher than they need to,” deputy Liberal leader Sussan Ley told ABC’s AM. All eyes will be on the banks to see which will be the first to pass on Tuesday’s rate rise to mortgage holders. “Where’s the plan on inflation? All eyes will be on the big four banks today as homeowners wait with bated breath to see if the latest rate hike will be passed on.

Home loan borrowers in Australia may well be wondering how high interest rates will go – here are the current cash rate predictions proffered by the big ...

He has a Bachelor of Laws (Honours) and a Bachelor of Arts with a major in Journalism from the [University of Queensland](https://law.uq.edu.au/). NAB: NAB is forecasting that the RBA will lift rates by 25 basis points at each of the next three meetings to a peak of 4.10% in May. Westpac: Westpac predicts the cash rate will climb by 25 basis points in March, April and May to a peak of 4.10%. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.” His work has also appeared on [ABC News](https://www.abc.net.au/news/alasdair-duncan/30290), Junkee, Rolling Stone, Kotaku, the Sydney Star Observer and The Brag. The RBA meets on the first Tuesday of every month, except for January. He has featured as a guest author for property website [homely.com.au](http://homely.com.au/). Alasdair Duncan is a Senior Finance Journalist at Canstar, specialising in home loans, property and lifestyle topics. “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,” he continued. “High inflation makes life difficult for people and damages the functioning of the economy,” said Lowe. ANZ forecasts that the first rate cut will be in November 2024. “And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later, involving even higher interest rates and a larger rise in unemployment.

Philip Lowe delivers speech saying it will soon be time to stop and assess the impact previous rate increases have had.

“It has the flexibility to respond as needed.” “Together, these data suggest that the risk of a prices-wages spiral remains low,” Lowe said. They were already figuring some pause, or even a peak rate, might be in the offing after Lowe said in that statement “the Board expects that further tightening of monetary policy will be needed”, replacing the previous month’s comments that the bank board expected multiple increases “in coming months”. “If this risk did materialise, the costs would be very high.” for many households,” he said, according to an advance copy of the speech. “If we don’t get inflation down fairly soon, the end result will be even higher interest rates and more unemployment.”

RBA governor Philip Lowe warns inflation is still too high and failing to bring it under control will only contribute to further interest rate rises.

At what point it will be appropriate to pause will be determined by the data and our assessment of the outlook.” “In the next month I’m meeting with Suicide Prevention and Lifeline, so we’re very alert to that. “These data suggest that the risk of a prices-wages spiral remains low. “If this risk did materialise, the costs would be very high. “They are important pieces of data that we can look at before the next board meeting. If we don’t get inflation down fairly soon, the end result will be even higher interest rates and more unemployment.

Reserve Bank governor Philip Lowe says he's painfully aware of what interest rates are doing to the community, but the clock is ticking on slaying ...

[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. [End in sight for RBA rate rises after 10th hike](https://www.afr.com/policy/economy/rba-lifts-rates-to-3-6pc-flags-at-least-one-more-increase-20230307-p5cpy1)The Reserve Bank could hit pause after a final rate increase next month, but will be on the lookout for evidence that inflation and the jobs market are cooling. [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. [Rate rise pause is in sight: Lowe](https://www.afr.com/business-summit/rate-rise-pause-is-in-sight-lowe-20230308-p5cq9k)RBA governor Philip Lowe says he is closer to hitting pause on rate rises and revealed that loan repayments are poised to consume a record share of wages. [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. [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. 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. It will be head over heart for a while to come. Traders also pushed pricing for the Fed’s terminal rate to 5.65 per cent, up a staggering 300 basis points from where it sat less than 12 months ago. The market now ascribing a 60 per cent chance to that. “How would you explain your view that they need to lose their jobs?” Will this for-the-greater-good message on interest rates resonate?

The Reserve Bank governor says the board is considering a pause after 10 consecutive interest rate rises, possibly as early as April, but the timing will ...

The most direct effect for households is on the cash flows of people with variable-rate mortgages," he said. "That is our ambition. It has the flexibility to respond as needed," he said. "At what point it will be appropriate to pause will be determined by the data and our assessment of the outlook." - The RBA says it is "closer to the point where it will be appropriate to pause interest rate increases" "We also discussed that, with monetary policy now in restrictive territory, we are closer to the point where it will be appropriate to pause interest rate increases to allow more time to assess the state of the economy.

BEHIND THE LATEST CASH RATE RISE * Australia's central bank, the Reserve Bank of Australia, increased interest rates...

* On the other hand, the RBA risks hiking interest rates too high and too fast and slowing the economy by more than is necessary to bring inflation down in a timely way. * While inflation is unlikely to get any higher, the RBA governor says not hiking rates enough could result in inflation that remains elevated for a long time and people becoming accustomed to it, which would, in turn, prompt even more interest rate hikes and a likely uptick in employment. * Central banks have one main tool to control inflation - interest rates - and will lift them in times of high inflation to make lending more expensive for businesses and consumers, which is intended to moderate economic activity and bring inflation down.