Australia raises interest rate to highest level in 15 years - Financial Times

Australia's central bank has lifted its benchmark interest rate to the highest level in 15 years, extending a tightening cycle that has run since May 2022. The decision reflects the Reserve Bank of Australia's ongoing effort to bring inflation back toward its target range, even as economic growth has shown signs of cooling.

For markets, the move matters for several reasons. Higher rates raise borrowing costs across mortgages, business loans and consumer credit, which can weigh on household spending and corporate earnings over time. They also tend to support the Australian dollar by improving the relative return on Australian assets, while pressuring rate-sensitive sectors such as property and retail.

What to watch next: the central bank's language on future policy, upcoming inflation and employment data, and how quickly tighter conditions feed through to consumer demand. Investors should note that rate decisions affect asset classes differently and with a lag, so the full economic impact typically emerges over several quarters rather than immediately.