RBA holds rates steady as the housing market softens. But another hike is still possible

The Reserve Bank of Australia held its interest rate steady at four point three five percent, The Conversation reports, signaling a pause in its rate-hiking campaign even as inflation remains stubbornly high. The central bank has raised rates three times this year, and the effects are becoming visible: the housing market has cooled considerably, with prices falling in Sydney and Melbourne, and mortgage applications down twenty percent since May. But the RBA faces a difficult balancing act. Inflation is still too high—the central bank's governor said another rate rise is possible if needed—while the economy is slowing. Growth is forecast to drop to one point four percent by December, and the jobs market shows signs of weakening. The RBA is holding steady to assess whether the three rate increases already delivered will be enough to bring inflation back under control without unnecessarily damaging growth. Financial markets place the odds of another rate rise by December at sixty-three percent.

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