On Tuesday, the Reserve Bank (RBA) Board increased the cash rate by 25 basis points to 2.6%. The move was smaller than the 50-basis point hike expected by markets, triggering sharp reactions in financial markets. Was this the right call?
By slowing down the RBA Board is buying time to help reduce the growing uncertainty over the economic outlook. However, slowing down also increases the risk that inflationary expectation become unanchored. Only time will tell if the RBA has selected the right course.
So, what does all this mean for future Reserve Bank Board meetings?
Watch this short video to find out more:
Australian Federal Budget 2022-23
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