Post #16202

RBA Doesn't Want To Hike Anymore, But Will If Forced The RBA hiked 25bps to 4.35% — third consecutive hike, 8-1 vote. The three 2026 hikes have completely unwound the three cuts from 2025. The RBA is the most aggressive major central bank right now. Headline CPI hit 4.6% in March and the board warned of second-round effects from elevated fuel prices. Even under their optimistic scenario — war resolves soon, fuel declines — inflation only returns to target slowly. Markets fully price 4.60% by September. But the statement also planted a pause signal: "monetary policy is well placed to respond to developments." The 8-1 vote was more hawkish than March's 5-4, yet the language suggests they may be done unless oil forces their hand. The Aussie is fighting a headwind — surging oil boosts safe-haven USD demand and undermines risk currencies. If the Strait stays closed, the RBA hikes again and AUD rallies. If it reopens, the hike pricing unwinds. Hormuz decides everything for AUD. - Alan