Oil Crisis Forces RBA's Hand: Rate Hike Looms

0:00This is Cory with Adelaide News today, powered by the Daily News Now. The latest war in the Middle East has triggered the biggest supply disruption ever in the global oil market, says the International Energy Agency. Crude oil, gas, and fertilizer prices have shot up, pushing petrol costs higher in Australia and across Asia. Markets now expect the Reserve Bank of Australia to raise interest rates this Tuesday, with another hike likely in May. Over the war, inflation concerns were already building pressure on the bank to act. Australia has kept unemployment super low, between 3.4% and 4.4% since late 2022. The bank has aimed to cool inflation slowly, without sparking a recession or higher joblessness, a shift from pre-COVID days when 5%. Unemployment was the target. Critics argue the bank should have hiked rates harder earlier to crush inflation for good. Officials defend keeping jobs plentiful as a win, even as supply shocks like the Russia Ukraine War tested their plan.

1:01Now, with this new oil crisis and warnings of ongoing supply disruptions from places like the International Monetary Fund, the bank faces tough, choices. Its cash rate sits at 3.85%, and some banks have already bumped up mortgage rates in anticipation. This DNN story comes to you, thanks to our sponsor. Podcasts hit different when the sound comes from your pillow. Once you try it, it just makes sense, S-O-L-I-SOLYPILLOW.com.