Australian Central Bank Rate Hike and Probably Not the Last One
May 2, 2023
The Reserve Bank of Australia‘s Official Cash Rate has been raised by 25 basis points and at 3.85% is 375 basis points higher than a year ago. Beginning in May 2022 from a pandemic base of 0.10%, the OCR was increased at every scheduled opportunity except in March 2022, when “the Board held interest rates steady to provide additional time to assess the state of the economy and the outlook.” Even though CPI inflation slowed from 7.8% in 4Q 2022 to 7.0% last quarter, officials project that it will not reach the ceiling of its 2-3% target until the middle of 2025. Consequently, officials do not rule out more tightening and will be particularly guided by “developments in the global economy, trends in household spending and the outlook for inflation and the labor market.”
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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