Weekly Market Update | 10 May 2023
The Reserve Bank of Australia (RBA) took the economists by surprise with its decision to raise interest rates by 25 basis points to 3.85%. Despite the release of weaker than expected quarterly inflation data, the Board considered a range of other factors, including a record low jobless rate and an impressive rebound in property prices.
Meanwhile, the Federal Reserve also met to decide on the US interest rate and raised rates by 25 basis points to a range of 5-5.25%. This increase was widely anticipated, but the markets are pricing in several cuts by the end of the year as the Fed attempts to balance stubborn inflation with growing fallout in the financial sector.
Days before the release of fresh US jobs data, which showed the US economy added 253,000 jobs in April, surprising economists who had predicted 180,000 added jobs, the rate decision was made.
In Australia, attention is on the federal government’s budget release, with a focus on cost-of-living measures expected to be highlighted amid the current inflationary environment.
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