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PM Announces $10b Fuel Security Package; RBA Hikes Interest Rates to Highest Level in Almost 18 Months
The Reserve Bank of Australia has hiked interest rates to their highest level in almost 18 months, while the Prime Minister unveiled a $10 billion fuel security package. The Silicon Review reports on the double policy shock hitting Australian households and banks. Australian borrowers woke to painful news on Wednesday as the Reserve Bank of Australia raised the cash rate by 25 basis points to 4.85 percent, the highest level since November 2024. The RBA's decision, its fifth consecutive hike, caught many economists off guard who had expected a pause after softening inflation data. In a separate but simultaneous announcement, the Prime Minister unveiled a $10 billion fuel security package aimed at bolstering Australia's domestic fuel reserves and reducing reliance on imported crude. The RBA's post-meeting statement cited sticky services inflation and rising global energy prices as key drivers. Governor Michele Bullock noted that underlying inflation remains above the 2–3 percent target band, forcing the board to act decisively. Markets immediately repriced expectations, with futures now implying a 40 percent chance of another hike in August. Why did the RBA hike rates to an...
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