Australia hikes rates to 18-year high to fight inflation

The Reserve Bank of Australia raised its cash rate to an 18-year high in its fifth hike of the year, a move that was in line with economists' expectations in a Reuters poll as the central bank battles persistent inflation. The decision underscores the RBA's determination to bring price pressures back to target despite signs of slowing growth, and it adds to the financial strain on mortgaged households already absorbing multiple increases in 2022. Markets and economists will now watch upcoming inflation data and Governor Philip Lowe's guidance for clues on whether the pace of tightening will slow at the next meeting, with the size of future moves likely to hinge on the September quarterly CPI print and global policy shifts at the Federal Reserve.