Overview
- The Reserve Bank of Australia is expected to raise the cash rate by 25 basis points to 4.35% at Tuesday’s meeting, with 30 of 33 economists in a Reuters poll backing the move.
- Expectations for further increases have shifted, with more than a third of forecasters now seeing rates at 4.60% or higher this year compared with none in March, while ANZ, CBA and NAB tip a peak of 4.35% and Westpac sees 4.85%.
- The closure of the Strait of Hormuz, a route for about one-fifth of global oil supply, has kept crude mostly above $100 a barrel and briefly above $126, pushing fuel and transport costs higher.
- Inflation remains above the 2% to 3% target, with annual CPI at 4.1% last quarter and core at 3.5%, after the RBA restarted hikes in February to unwind last year’s cuts.
- Households face higher repayments if the RBA moves again, with a quarter-point rise adding about A$2,657 a year to payments on an average A$736,259 mortgage, according to Finder.