On June 6, the RBA announced its interest rate decision.。Under the resolution, the bank raised its cash rate target by 25 basis points to 4.10%, in addition, the bank raised the interest rate on trade settlement account balances by 25 basis points to 4.00%。

"Rate hikes reflect more persistent inflationary pressures"

In April, the RBA was the first to announce that it would keep the policy rate at 3.6% level, becoming the first major developed country central bank to suspend interest rate hikes since the outbreak of the banking crisis.。Previously, in the context of global central banks seeking to control inflation, the bank has raised interest rates 10 times since May last year, a total of 350 basis points。At the time, the RBA said there was a lag in monetary policy and that the impact of the previous sharp rate hike had not yet been fully felt, so it decided to keep rates unchanged to allow more time to assess the impact of the rate hike and the economic outlook.。

As we enter May, the RBA's just-suspended rate hike is suddenly changing again。On May 2, the bank announced that it would raise its benchmark interest rate by 25 basis points to 3.85%, a new high since 2012, caught the market by surprise。In response, the RBA said 7 per cent inflation was still too high and it would take some time to return to the target range.。In addition, the bank gave its own inflation outlook, which is expected to be 4.5 per cent, which could fall to 3 per cent by mid-2025。

However, in late May, according to data released by the Australian Bureau of Statistics, the country recorded a quarterly unemployment rate of 3 in April..7%, higher than the expected value of 3.5%, the first rise in the year。At the time, only Goldman Sachs among the big banks expected the RBA to raise interest rates by another 25 basis points, while many others, including the Commonwealth Bank of Australia, said the RBA's tightening cycle was over。In addition, only 10 of the 30 economists surveyed by the media before the rate decision gave a rate hike forecast.。

Arguably, the RBA's 25 basis point rate hike this time was really unexpected。After the release of the data, the Australian dollar against the dollar short-term pull up 0.68%, reported 0.6666。Australian Finance Minister Jim Chalmers said the rate hike reflected more persistent inflationary pressures.。

RBA rate decision: further monetary tightening may be needed

After the policy announcement, the RBA said in its interest rate decision that Australia's inflation had peaked but was still at 7 per cent, still high and it would take some time to return to the target range.。The further increase in interest rates is to be more confident in ensuring that inflation returns to target within a reasonable time frame.。The bank also noted that high inflation is troubling and hurting the functioning of the economy.。It erodes the value of savings, hurts household budgets, makes it harder for businesses to plan and invest, and exacerbates income inequality.。If high inflation takes root in people's expectations, it will bring huge costs later, including higher interest rates and greater unemployment.。

Recent data suggest that upside risks to the inflation outlook have increased, and the board has responded。Although inflation in commodity prices is slowing, inflation in service prices remains very high and shows strong persistence overseas。Unit labor costs are also rising rapidly, while productivity growth remains sluggish。

Regarding the employment situation, the RBA said that Australia's economic growth has slowed down and labor market conditions have eased, although they are still very tight.。The unemployment rate rose slightly to 3 in April..7%, employment growth also slowed。Businesses report labor shortages have eased, although job openings and advertising remain at very high levels。In addition, wage growth has accelerated due to a tight labor market and high inflation.。Public sector wages are expected to rise further, with annual increases in incentive pay also higher than last year.。Overall, wage growth remains in line with the inflation target, provided that productivity growth accelerates。

The RBA also noted that the Board remains vigilant that the expected continued high inflation could lead to further price and wage growth, especially given the limited idle capacity in the economy and the still very low unemployment rate.。As such, it will continue to closely monitor the evolution of labor costs and firms "pricing behavior.。The bank also pledged to remain committed to keeping the economy stable and returning inflation to the 2-3 per cent target range, but the path to a smooth transition remains narrow.。Significant uncertainty remains in the outlook for household consumption。Rising interest rates and cost-of-living pressures have led to a sharp slowdown in household spending.。House prices are rising again, and some households have sizeable savings buffers, but others are under financial pressure。There is also uncertainty in the global economy, where growth is expected to be below average over the next few years.。

On the outlook for monetary policy, the bank noted that further tightening of monetary policy may be needed to ensure that inflation returns to target within a reasonable time frame, but this will depend on the evolution of the economy and inflation.。The Board will continue to closely monitor developments in the global economy, household consumption trends and the outlook for inflation and the labour market.。The Board is strongly determined to return inflation to target and will take the necessary measures to achieve this。

Defeating inflation won't be easy

In response to the rate hike, Westpac said that while the RBA board raised the cash rate in May and June, it also expects to raise rates further in July to strengthen its commitment to eliminate inflation.。In addition, the bank also believes that the RBA board may take further action at its August meeting, when Australia's second-quarter inflation data will be released and the Hong Kong bank expects potential inflation to fall to 6.1%, but it predicts that the labor market will remain tight and wage pressures may continue.。

Foreign exchange trader Wansheng believes that today's RBA interest rate decision fell hawkish, the bank abandoned its previous statement on medium-term inflation to maintain a good anchor, to support inflation is still too high, exacerbating the signal of further interest rate hikes, the market bets on the RBA to raise interest rates in July has risen to 60% of the level。

Union Bank of Belgium said the RBA's decision to raise interest rates was a wake-up call for global central banks and markets: beating inflation will not be easy。

Australia, US and Japan up more than 0 as of press time.5%, now trading at 0.6653, the daily line level high probability recorded four consecutive positive。

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