Australia's Interest Rates Hit 15-Year High Amid Predictions of Further Hikes

The Reserve Bank of Australia (RBA) raised interest rates to a 15-year high on Tuesday, pushing the cash rate target up by 25 basis points to 4.6%. This move was in line with expectations from financial markets and economists.

RBA governor Michele Bullock said inflation was too high and that the central bank needed to lift interest rates to bring it down. She also mentioned that financial conditions are restrictive, and the impact of previous rate hikes is still filtering through the economy.

Economists were divided on whether the RBA would hike again or if the cash rate would peak at 4.6%. Some analysts believe another rate hike in November is possible, while others think rates will remain on hold until mid-2027.

The average owner-occupier variable rate will climb to about 6.5% after another rate rise, making monthly repayments $550 higher than at the start of this year.