The Reserve Bank of Australia (RBA) increased the cash rate a further 25 basis points to 2.60 per cent, signaling the end of the RBA’s recent run of half percentage-point hikes.
Read today’s official statement on the RBA’s website.
Today’s decision is in line with what Reserve Bank Governor Philip Lowe recently told a House of Representatives’ economics committee and follows five consecutive rate increases from May to September.
Mr Lowe has warned Australians there are still more interest rate rises to come in the months ahead, with inflation at its highest level since the early 1990s. Factors driving this include upward pressure on prices, an extremely tight labour market and capacity constraints in some sectors of the economy.
The RBA still expects inflation to peak later this year, before dropping back to the 2–3 per cent range in 2023.
With the US Federal Reserve tightening its monetary policy and raising rates, the pressure is on the RBA to follow suit to stabilise the Australian dollar.
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The lending market is awash with sweeteners to switch loans, so make sure you speak with Fornaro to ensure you consider all your options.