The Reserve Bank of Australia has raised the cash rate to 4.6 per cent, the highest in 15 years, following its fourth rate increase this year. Governor Michele Bullock acknowledged that the decision would 'pretty hard' on some households, particularly first home buyers, as higher interest rates reduce borrowing capacity. The rate rise, widely anticipated by economists and major banks, aims to bring down inflation, which remains above the target range of 2-3 per cent. Bullock emphasized that while the bank aims to preserve employment gains, reducing inflation is critical to long-term economic stability. Property market expert Mathew Tiller noted that the rate hike would dampen spring property market activity, traditionally the busiest period, with house prices likely to remain subdued. First home buyers, who have faced four rate increases since February, now face a significant reduction in the maximum loan amount they can secure. For instance, a buyer who could borrow $800,000 at the start of the year now faces a cap of approximately $720,000. This reduction in borrowing capacity is expected to intensify competition among buyers for lower-priced properties. The Reserve Bank has maintained that higher unemployment may be necessary to curb inflation, though Bullock expressed reluctance to see job losses. She stressed that the strategy is to balance preserving labour market gains while reducing inflation, as prolonged high inflation would ultimately harm employment. The central bank's actions reflect a continued focus on addressing inflationary pressures, with the current rate hike being part of a broader effort to stabilize the economy. Despite rising unemployment to 4.6 per cent in August—the highest since the pandemic—the bank remains unconvinced that the economy is sufficiently constrained. The Reserve Bank's approach underscores the delicate balance between managing inflation and protecting household finances, particularly for those entering the property market. With the property market already experiencing falling prices, the rate increase is expected to further suppress activity, leading to more realistic pricing expectations from sellers and increased selectivity from buyers. The impact on first home buyers is particularly pronounced, as their ability to secure loans has diminished significantly, potentially delaying their entry into the housing market. The central bank's commitment to achieving its inflation target of 2.5 per cent remains firm, even as it acknowledges the short-term hardships faced by households.

The Reserve Bank of Australia raised the cash rate 25 basis points to 4.60%, its fourth hike of 2026 and the highest level since late 2011, with inflation at 3.5%.

The Reserve Bank of Australia (RBA) has finally adopted a strategy to address the cost-of-living crisis and rising inflation, marking a significant pivot from its previous approach. According to an opinion piece by Richard Holden, an economics professor, the central bank's delayed recognition of the inflation problem is 'beyond belief,' requiring an 18-month listening tour akin to a Hillary Clinton-style campaign to understand public sentiment. Holden criticises the RBA for not acting sooner, stating that the central bank has the power to address inflation but has been slow to do so. The article highlights the growing public frustration with inflation, noting that people are increasingly vocal about their dissatisfaction. The RBA's recent actions, including potential interest rate adjustments, are seen as a response to this mounting pressure. The piece underscores the importance of the RBA fulfilling its mandate to manage inflation effectively, rather than relying on 'hopeium'—a term used to describe misplaced optimism. The article also references the broader economic context, including the need for the RBA to balance its monetary policy with the current cost-of-living challenges. While the RBA has been cautious in its approach, the recent pivot indicates a shift towards more proactive measures to stabilise prices and support households facing financial strain. The opinion piece serves as a call to action for the central bank to take decisive steps in addressing inflation, which has become a critical issue for Australian households and businesses alike.

At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 4.60 per cent.

US 10-year Treasury yields surged above 5.27 percent during early trading, marking the highest level since 1994 and spooking Asian equity markets amid rising oil prices.

With inflation proving stubborn and global economic pressures mounting, Australians are bracing for another potential interest rate rise. The Reserve Bank of Australia (RBA) is considering increasing the cash rate to its highest level since 2011, which could further strain struggling households. Guardian Australia economics editor Patrick Commins joined Reged Ahmad on the Full Story podcast to discuss the factors driving the RBA's decision, including the impact of fuel wars and artificial intelligence on the economy. The podcast also highlighted concerns about diesel prices potentially surging beyond $3 a litre as Trump eyes cut to US fuel exports. The RBA's decision on interest rates is crucial for the broader economic outlook, affecting household budgets, business investments, and overall market stability. With the current economic climate, the RBA faces the challenge of balancing inflation control with supporting economic growth. The discussion emphasized the complex interplay between global events, such as geopolitical tensions affecting fuel supplies, and technological advancements like AI that are reshaping economic dynamics. As the RBA prepares to make its next move, the focus remains on how these forces will influence monetary policy and the future of the Australian economy. The podcast provides a comprehensive analysis of the key drivers behind the RBA's rate decision, offering insights into the challenges and opportunities facing the nation's economic landscape.

KUALA LUMPUR, Sept 28 (Bernama) — The ringgit ended lower against the US dollar on Monday, weighed down by continued hawkish sentiment surrounding US interest rates. At 6 pm, the ringgit dropped to 4.0805/0845 versus the greenback from Friday’s close of 4.0715/0765. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam said hawkish signals from US Federal Reserve (Fed) officials continued to weigh on the foreign exchange market. He said indications from Fed officials, including Philadelphia Fed President Anna Paulson, suggested that further rate increases are ahead. “Against this backdrop, US Treasury yields for the two- and 10-year maturities rose […]

TMUBMUSD10Y | A complete U.S. 10 Year Treasury Note bond overview by MarketWatch. View the latest bond prices, bond market news and bond rates.

Mortgage holders in Australia are preparing for the highest interest rates since 2011, as the Reserve Bank of Australia (RBA) is expected to raise its cash rate at its September meeting. All four major banks predict a rate increase, with ANZ also forecasting a further rise in November. The cash rate is projected to exceed the 2022-2023 hikes, reaching a 15-year high not seen since October 2011. Despite the rate increase, home loan debt has surged by 138% since 2011, with residential mortgage values rising from $1.05 trillion to $2.51 trillion by July 2026. A 0.25 percentage point increase would add $91 to monthly repayments for a $600,000 loan with 25 years remaining. Canstar data insights director Sally Tindall highlighted that while the cash rate may return to 2011 levels, borrowers now carry over double the debt compared to 15 years ago. The cumulative impact of multiple rate rises means borrowers could face an additional $364 per month compared to the start of the year. Owner-occupiers with loans on autopilot may end up with rates exceeding 7% after the next hike. The RBA's decision is influenced by persistent inflation, with 90% of economists surveyed by Finder predicting a rate rise. Housing Industry Australia's chief economist Tim Reardon noted that falling home prices, a result of previous rate increases, are expected to reduce inflationary pressures over time. The article emphasizes the significant financial strain on homeowners amid these economic conditions.

The Globe and Mail has published an analysis identifying twelve U.S. stocks that are well-positioned to thrive in a high-interest-rate environment. The article, authored by Anuj Anand, Investment Analyst at Inovestor, outlines a screening process for mid- and large-cap companies with market capitalizations exceeding US$5 billion. The criteria include debt-to-EBITDA below 1.0 times, free cash flow yield greater than 5%, three-year average return on invested capital (ROIC) above 10%, interest coverage ratio greater than 10 times, and dividend yield exceeding 2.5%. Among the companies highlighted are Accenture PLC, which boasts a 31% three-year average ROIC and a debt-to-EBITDA ratio of 0.6 times; EOG Resources Inc., with an impressive interest coverage ratio of 34.2 times and a 16.2% free cash flow yield; and Watsco Inc., featuring a 23.4% three-year average ROIC, debt-to-EBITDA of 0.5 times, and a 4.2% dividend yield. The article emphasizes that companies with conservative leverage, strong cash flow generation, and high returns on invested capital are better equipped to handle elevated borrowing costs and maintain profitability. It notes that the Federal Reserve's 'higher-for-longer' monetary policy is ending the era of cheap debt, increasing pressure on corporate earnings, particularly for heavily indebted companies. The analysis suggests these selected stocks offer financial resilience, the ability to fund internal growth without relying on expensive credit markets, and potential outperformance during restrictive monetary policy regimes. The article concludes with a standard disclaimer advising investors to conduct further research before making investment decisions. The piece is part of The Globe and Mail's business and investing coverage, providing insights for investors navigating a changing interest rate landscape.

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