RBA interest rates live updates: Reserve Bank boss Bullock says war, petrol pain not reason for hike

VanEck’s head of investments and capital markets Russel Chesler says today’s hike will be a blow to every homeowner, but the real pain may be yet to come.

He said while the decision was widely expected, markets are already building in as many as two additional increases this year, potentially taking the cash rate to around 4.6 per cent.

“In our view, that outlook assumes oil prices remain structurally higher for an extended period, which may not materialise,” Mr Chesler said.

“Oil shocks linked to geopolitical events typically prove temporary and often have the opposite effect on inflation caused by reduced commercial activity.

“Australian consumers are already feeling the impact at the petrol pump, and sentiment has deteriorated sharply.

“In that environment, the risk is not runaway inflation but a slowdown in demand. We think that ultimately limits how far the RBA can push rates higher this cycle.”

When it comes to taming inflation, the RBA has but one level to pull - and that’s to stop households spending by shifting more of their income into mortgage repayments.

It’s a disproporionaty unfair system, especially given those same household are also being hammered at the pump.

But Bullock and Co. have never shied away from inflict more pain in the name of economic stability.

If you’re a homeowner, here’s how much extra you’ll need to find each month ...

Today’s policy decision was made by majority - five members voted to increase the cash rate target by 25 basis points to 4.10 per cent, four members voted to leave the cash rate target unchanged at 3.85 per cent.

The Reserve Bank says there are “material uncertainties about the outlook for domestic economic activity and inflation” and the extent to which monetary policy is restrictive.

“Globally, the conflict in the Middle East poses substantial risks in both directions,” it said.

“A longer or more severe conflict could put further upward pressure on global energy prices; this will push up near-term inflation and could also increase inflation further out if it impairs supply capacity or price rises get built into longer term inflation expectations.

“Higher prices and prolonged uncertainty may cause growth to be lower in Australia’s major trading partners and also in Australia.”

The board acknowledged that while inflation had fallen substantially since its peak in 2022, it picked up materially in the second half of 2025.

It also noted that data since the February meeting suggests that some of the increase in inflation reflects greater capacity pressures.

“In addition, the conflict in the Middle East has resulted in sharply higher fuel prices, which, if sustained, will add to inflation,” it said in its statement released just moments ago.

“Short-term measures of inflation expectations have already risen. As a result, the board judged that there is a material risk that inflation will remain above target for longer than previously anticipated.”

A nervous RBA board has moved before it’s too late, lifting official rates 25 basis points to take it back over 4 per cent.

The decision to take the cash rate to 4.1 per cent will add between $76 and $91 to the average borrow’s month repayments.

Taken together with February’s increase, they’ll now need to find another $151 to $181 a month.

... and why, as a homeowner with a mortgage, building that home loan buffer is so, so important.

Just four weeks ago, Treasurer Jim Chalmers declared that the worst inflation challenge was now behind us and spent a good amount of time defending the Albanese Government and his fiscal policy after inflation soared at the start of the year.

Dr Chalmers doubled down on his comments from 2025, where he said the worst of the inflation challenge was behind us.

Then came the bombs in Iran, a choked Strait of Hormuz and the reminder that life is never that easy.

Ahike by the RBA today will push owner-occupier mortgage rates above 6 per cent, warns Canstar.

For someone with a $600,000 mortgage and 25 years remaining, this would add $91 to in their minimum monthly repayments.

Taken together with February’s rise, the two back-to-back hikes would be $181 a month.

The comparison site its tracking shows in the past two weeks, 27 lenders have hiked at least one fixed rate ahead of today’s decision as they move to factor in higher borrowing expenses.

On the savings front, 41 banks have increased at least one term deposit rate, as banks recalculate the possibility for higher deposit costs.

What does that meanif the RBA hikes today?

A 0.25 percentage point hike would push the average owner-occupier variable rate into the 6s to an estimated 6.01 per cent. This would be the first time this average was above 5 per cent since April 2025.

A competitive rate is likely to sit at 5.75 per cent or less, with more than 40 lenders offering at least one owner-occupier rate under this mark, while the lowest variable rate is likely to land at or just below 5.50 per cent.

There’s one group of experts calling on the RBA to resist the temptation to lift rates today and wait until the full economic impact of the Middle East conflict is known.

Finance Brokers Association of Australia says while economic triggers may exist for the board to raise the cash rate, it warned “these are not usual times”.

“Australians are yet to experience the cost of living increases that are predicted to hit soon due to the Middle East conflict,” said FBAA interim CEO Peter White.

“We expect that not only will fuel costs increase but this will flow through to other supply chain increases and potentially add hundreds of dollars every month to the average household budget.

“f interest rates rise as well, many mortgage holders may struggle to meet the increased payments.

“This is particularly the case for first home buyers.”

Mr White said a pause today would “prioritise the financial and emotional wellbeing of Australians facing an uncertain immediate future”.

We’re an hour away from the RBA decision ... and two hours from Michele Bullock’s post-call presser.

If it’s a hold, we’ll hopefully find out what the next few meeting may have in store for homeowners.

If it’s a hike, we’ll hear just how seriously the board is taking the potenial ripple effects of the Middle East war ... and just6 how far it’s willing to go to keep inflation in check.