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

The Reserve Bank of Australia has lifted its benchmark interest rate to the highest level in 15 years, according to the Financial Times, extending a tightening cycle that has steadily raised borrowing costs across the economy.

For markets, the decision matters because it signals that policymakers still see inflation as a persistent risk rather than a fading one. Higher rates tend to cool demand by making mortgages, business loans and credit more expensive, which can weigh on consumer spending and corporate earnings over time. They can also support the currency by improving the relative return on Australian assets, while pressuring rate-sensitive sectors such as housing and retail.

What to watch now is the path ahead: whether further increases follow, how quickly inflation and wage data respond, and whether household budgets and business investment show signs of strain. For globally minded investors, Australia's move also fits into a broader question of whether major central banks are nearing the end of their tightening campaigns or still have further to go.