Fed’s Goolsbee Warns Inflation Remains Elevated, Signals Caution on Rate Cuts 
Trump Plans 25% Tariff on EU Car Imports Amid Rising U.S.-EU Trade Tensions 
Gold Prices Hold Steady Amid Iran Tensions and Interest Rate Uncertainty 
Eurozone Recession Risks Rise as Middle East Conflict Threatens Growth, ECB Official Warns 
Japan Inflation Expectations Rise as BOJ Rate Hike Timing Faces Uncertainty 
Singapore Tightens Monetary Policy Amid Middle East War Inflation Risks 
Gold Prices Edge Higher Amid Middle East Tensions and Oil Market Volatility 
Asian Markets Slip Amid Strait of Hormuz Tensions and RBA Rate Hike Expectations 
BOJ Governor Kazuo Ueda Hints at Rate Hike as Inflation Pressures Build 
European Stocks Volatile as U.S.-Iran Tensions Threaten Oil Supply and Global Markets 
BOJ Rate Decision in Focus as Yen, Inflation, and Nikkei Hang in Balance 
Yen Stabilizes After Suspected Intervention as Global Currency Markets Stay Cautious 
Bank of Korea Signals Potential Interest Rate Hikes as Inflation Remains Elevated 
Wall Street Mixed as Apple Earnings Boost Nasdaq and Oil Prices Ease 
Middle East Conflict Impacts Australia and New Zealand Businesses 
Asian Stocks Rise Slightly as Oil Prices Hold Steady Amid Middle East Uncertainty 
The Reserve Bank of Australia (RBA) increased its benchmark interest rate by 25 basis points to 4.35% on Tuesday, a move widely anticipated by markets. The decision reflects growing concerns over inflation, particularly as global uncertainties—such as the ongoing conflict in the Middle East—continue to pressure energy markets and overall price stability.
Eight out of nine members of the RBA’s policy board supported the rate hike, signaling strong consensus around tightening monetary policy. The central bank emphasized that inflation remains above its target range of 2% to 3% and is expected to stay elevated for an extended period. As a result, maintaining a restrictive policy stance is seen as necessary to bring inflation under control.
The RBA revised its inflation outlook upward, forecasting consumer price index (CPI) inflation to reach 4.0% this year, compared to its previous estimate of 3.6%. Core inflation, measured by trimmed mean CPI, is now projected to hit 3.5% by the end of 2026, also higher than earlier expectations. These revisions highlight persistent inflationary pressures, partly driven by supply disruptions linked to geopolitical tensions.
At the same time, the central bank downgraded its economic growth forecast. Australia’s GDP is now expected to grow by just 1.3% in 2026, down from the prior estimate of 1.8%. This reflects the balancing act between controlling inflation and sustaining economic activity.
Despite the latest increase, the RBA acknowledged uncertainty regarding how restrictive current monetary conditions are. Financial markets are already pricing in the possibility of another rate hike, potentially as soon as June. Analysts from Capital Economics predict the cash rate could peak at 4.60% by August, with further increases possible if inflation continues to exceed expectations.
Following the announcement, the Australian dollar weakened slightly, with AUD/USD falling around 0.2%. Meanwhile, the ASX 200 index also declined, reflecting cautious investor sentiment in response to tighter financial conditions and ongoing global risks.
