Australia Unexpectedly Raises Key Rate

The video discusses the recent changes in the cash rate, which was raised by 25 basis points to 4.1%, as predicted by some economists. There was division among economists about the direction of the rates, but traders believed any hold would be temporary. Inflation is said to have peaked but remains high, prompting immediate market reactions, including a rise in the Aussie dollar. Further monetary policy tightening may be needed. The Australian economy's growth has slowed, and the rate hike aims to ensure CPI returns to target. The central bank is committed to achieving this, echoing recent statements by Christine Lagarde.

What was the new cash rate after the increase?

• 4.1%

• 4.5%

• 3.5%

• 5.0%

How did traders perceive the central bank's decision to hold rates?

• As a signal for rate cuts

• As a permanent halt

• As a temporary pause

• As a sign of economic stability

What was the immediate effect on the Aussie dollar following the rate announcement?

• It dropped by 0.5%

• It rose by 0.8%

• It remained stable

• It fell by 1%

What is the central bank's goal regarding CPI?

• To ignore it

• To increase it

• To maintain it

• To return it to target

Who was mentioned in relation to the central bank's commitment to CPI targets?

• Jerome Powell

• Janet Yellen

• Christine Lagarde

• Mario Draghi