Central Banks Eye More Rate Hikes Amid Rising Inflation Concerns

The Reserve Bank of Australia (RBA) raised interest rates by 25 basis points to 4.6%, its highest level in 15 years.

Despite expectations, the move was met with a hawkish outlook from the RBA, warning of rising inflation risks due to higher energy prices, strong domestic demand, and increased tech costs amid the AI boom.

The central bank also noted that companies are facing higher costs and are either raising prices or preparing to do so, while inflation has come in above previous forecasts.

The US Federal Reserve (Fed) is also considering a rate hike, with markets pricing in around a 70% chance of a Fed hike at the October 28 meeting due to rising US inflation expectations and resilient consumer demand.