RBA minutes: Eight of nine members backed May hike as inflation expectations risk grew
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RBA minutes show eight of nine board members backed the May rate hike to 4.35%, citing rising inflation risks from the Gulf conflict, with markets now pricing a 75% chance of a further August rise. Earlier: Hunter: Inflation expectations drifting higher is an elevated risk RBA ca
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4 itemsMay meeting, RBA set for third straight hike as Hormuz closure drives inflation surge
The Reserve Bank of Australia (RBA) is set to deliver its third consecutive rate hike on May 5, raising the cash rate by 25 basis points to 4.35%, driven by persistent inflation pressures exacerbated by the closure of the Strait of Hormuz. Per the full note [source], a recent Reuters poll indicates that over a third of economists now expect rates to exceed 4.60% by year-end, a significant shift from previous forecasts. This adjustment reflects heightened concerns over core inflation, which is now forecast to average 3.8% this year, up from 3.1% prior to the geopolitical tensions. The RBA's cautious stance is informed by its recent experience with inflation rebounding swiftly after rate cuts in 2025, prompting a more aggressive approach to monetary policy.