![\"Petrol](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/03\/dff054824e68cdf6e7acdf670c671421.jpeg\")
The price of oil plunged overnight on the hope that world leaders would release reserves. Picture: NewsWire \/ Luis Enrique Ascui <\/p>\n The price of oil plunged overnight on the hope that world leaders would release reserves. Picture: NewsWire \/ Luis Enrique Ascui <\/p>\n
A big four bank is now predicting three rate hikes in a row as one of the Reserve Bank\u2019s most senior figures casts a grim warning about next week\u2019s interest rate meeting.<\/p>\n
Economists at NAB have become the latest to change their rate prediction, expecting an interest rate hike in both March and May.<\/p>\n
\u201cThe starting point of robust growth, a too-tight labour market and too-high inflation already supported further tightening,\u201d NAB chief economist Sally Auld wrote in a note.<\/p>\n
Should the RBA follow her prediction, it would be three interest rate hikes in a row, after the central bank lifted rates by 25 basis points to 3.85 per cent in Februray.<\/p>\n
It would also completely reverse the three interest rate cuts the RBA made in 2025.<\/p>\n
Rising oil prices are adding to inflationary pressures. Picture: NewsWire \/ Luis Enrique Ascui <\/p>\n
Earlier, RBA deputy governor Andrew Hauser raised fears the RBA board could increase the official cash rate next Tuesday, a change from previous indications it would hold off on a rise till the May meeting.<\/p>\n
He said the \u201coil shock\u201d from the conflict across the Middle East following the US\/Iran war had changed the outlook for inflation, which was already above the central bank\u2019s target of 2-3 per cent. \u201cInflation is too high, higher prices don\u2019t help that debate,\u201d he told Michelle Grattan\u2019s podcast on Wednesday.<\/p>\n
\u201cBut there are arguments on both sides and I think if ever there was a time when board members will earn their meagre salary, it will be this month.\u201d<\/p>\n
RBA deputy governor Andrew Hauser warns Tuesday\u2019s meeting is a \u201cgenuine debate\u201d. Picture: NewsWire \/ Martin Ollman <\/p>\n
Mr Hauser noted inflation was the key risk to the Australian economy, which in other aspects is outperforming global peers.<\/p>\n
\u201cThe Australian economy in many ways is in good shape. Growth has recovered quite materially over the last year, unemployment is close to historic lows and compares very favourably internationally and average levels of wealth are pretty good,\u201d he said.<\/p>\n
\u201cBut we have a problem with inflation, it is too high.<\/p>\n
\u201cOur projection is inflation will only return to the midpoint of the target range in 2028 \u2026. That was before the oil shock\u201d<\/p>\n
Mr Hauser rejected fears inflation \u2013 which is currently at 3.8 per cent \u2013 would reach the 5 per cent level, which economists fear based on oil prices jumping above $US100 a barrel.<\/p>\n
Since the oil shock began, expectations of a rate hike have risen, with the money market currently backing in a 65 per cent chance of an interest rate hike at the March 16-17 meeting.<\/p>\n
Mr Hauser said there was never an obvious answer when it came to making an interest rate decision.<\/p>\n
\u201cIf we fail to act decisively enough to prevent inflation staying high or rising and expectations of inflation (rises) \u2026 it will be bad for everyone.\u201d he said.<\/p>\n
\u201cIt is worth continuing to remind ourselves just how toxic inflation is.\u201d<\/p>\n
But Mr Hauser conceded there were risks on the other side and raising interest rates could have a negative effect on the national economy.<\/p>\n
\u201cIf you compound uncertainty, driving the economy to slow down too rapidly, then you\u2019re going to push inflation down but harm people as unemployment picks up,\u201d he said.<\/p>\n
\u201cTo be frank we are always balancing those two alternative risks but the scale of both the upside and downside is larger than normal.<\/p>\n
Capital Economics senior APAC economist Abhijit Surya warned for markets that the RBA will announce back-to-back rate hikes in March and May.<\/p>\n
\u201cThe conditions for a sustained acceleration in inflation were in place even before the Iran conflict broke out,\u201d he said.<\/p>\n
\u201cWith the spike in energy prices adding further pressure, the risk is that the bank will fall further behind the curve if it doesn\u2019t act decisively to tighten policy.\u201d<\/p>\n
Bank of America head of Australia and New Zealand economics Nick Stenner said the Middle East oil crisis introduced a \u201cmaterial\u201d upside inflation risk.<\/p>\n
\u201cGiven above-target inflation and a tight labour market, we see no compelling reason to delay the inevitable,\u201d Mr Stenner said.<\/p>\n
Wild 48 hours of trading<\/p>\n
The Iran war and resulting oil shock has also caused chaos on global share markets with the ASX 200 experiencing a wild week.<\/p>\n
Shortly after the opening on Wednesday, the ASX 200 was up 26.7 points or 0.31 per cent to 8719.30 points at 10.30am.<\/p>\n
In the US, the S&P 500 slipped 0.2 per cent and the Dow dipped 0.1 per cent, while the technology-heavy Nasdaq Composite traded flat.<\/p>\n
Wednesday\u2019s marginal move follows a volatile 48 hours on the market when the ASX sensationally fell by as much as 4.4 per cent on Monday before recovering during the afternoon\u2019s trading to close down 2.85 per cent.<\/p>\n
The price of oil plunged overnight on the hope world leaders would release reserves. Picture: NewsWire \/ Luis Enrique Ascui <\/p>\n
On Tuesday, the market jumped 1.1 per cent as the recovery began.<\/p>\n
The market\u2019s volatility continues as Australian investors factor in what higher oil prices will mean for inflation and next week\u2019s all-important interest rate decision.<\/p>\n
As economists fear oil price shocks, the price of crude plunged overnight on hopes that world leaders would release reserves.<\/p>\n
West Texas Intermediate futures fell as low as $US76.73 ($A106) per barrel but closed down nearly 12 per cent at $US83.45 ($A117) per barrel.<\/p>\n
Brent crude lost more than 11 per cent to settle at $US87.80 ($A122) a barrel.<\/p>\n","protected":false},"excerpt":{"rendered":"The price of oil plunged overnight on the hope that world leaders would release reserves. Picture: NewsWire \/…\n","protected":false},"author":2,"featured_media":528473,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,10080,5977,35428,207191,207586,54814,207585],"class_list":{"0":"post-528472","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy","12":"tag-interest-rate","13":"tag-labour-market","14":"tag-luis-enrique","15":"tag-oil-shock","16":"tag-price-of-oil","17":"tag-rate-hike","18":"tag-rate-hikes"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/528472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=528472"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/528472\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/528473"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=528472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=528472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=528472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}