Australian economic resilience gives RBA room for further rate hikes, FC Capital says
TLT•FC Capital says Australia’s economic resilience, low unemployment and strong growth give the Reserve Bank of Australia room for further rate increases despite fuel-driven inflation. The RBA has raised rates four times this year, and inflation would have been flat since July without automotive fuel prices.
1. Rate outlook and fuel costs
FC Capital says Australia’s economic resilience gives the Reserve Bank of Australia room for further rate increases despite fuel-driven inflation. It says low unemployment and strong growth provide scope to tighten monetary policy without pushing the economy into recession; the RBA has raised rates four times this year, and inflation would have been flat since July without automotive fuel prices.
2. Oil shipping pressures
Brent crude is at its highest since the Iran war began, while Strait of Hormuz exports remain well below prewar levels. Shipping insurance rates have risen more than sevenfold, and ship-to-ship transfers in the Gulf of Oman cost up to $30 per barrel.
