Boom! Australia just hit the brakes on its economy!
The Reserve Bank of Australia (RBA) raised interest rates by 25 basis points to 3.85%, the first hike since November 2023!
This came after inflation jumped to its highest level in six quarters.
Key numbers:
Annual consumer inflation climbed to 3.8% in December (up from 3.4% the month before)
Housing costs (especially electricity bills) were the biggest driver.
The RBA said unanimously that “Private demand is growing faster than expected, capacity pressures are bigger, and the labour market is a bit tight.”
Inflation picked up a lot in the second half of last year.
Experts now think inflation will stay above the 2.5% target well into next year before slowly coming down.
After three rate cuts in 2025, the bank flipped direction. Governor Michele Bullock and team have been warning for months: No rate cuts soon, and maybe even more hikes if inflation stays stubborn!
The economy is strong too, it grew 2.1% in the third quarter (fastest in about two years).
Global strength + AI boom in East Asia helped keep things hot… but that also makes it harder to cool inflation down.
Australia is fighting sticky inflation head-on!
$BTC
The Reserve Bank of Australia (RBA) raised interest rates by 25 basis points to 3.85%, the first hike since November 2023!
This came after inflation jumped to its highest level in six quarters.
Key numbers:
Annual consumer inflation climbed to 3.8% in December (up from 3.4% the month before)
Housing costs (especially electricity bills) were the biggest driver.
The RBA said unanimously that “Private demand is growing faster than expected, capacity pressures are bigger, and the labour market is a bit tight.”
Inflation picked up a lot in the second half of last year.
Experts now think inflation will stay above the 2.5% target well into next year before slowly coming down.
After three rate cuts in 2025, the bank flipped direction. Governor Michele Bullock and team have been warning for months: No rate cuts soon, and maybe even more hikes if inflation stays stubborn!
The economy is strong too, it grew 2.1% in the third quarter (fastest in about two years).
Global strength + AI boom in East Asia helped keep things hot… but that also makes it harder to cool inflation down.
Australia is fighting sticky inflation head-on!
$BTC