Just nowTue 5 May 2026 at 5:26am

Reserve Bank governor speaking shortly

We’ll be bringing you live coverage of Michele Bullocks press conference, and you can watch on ABC News Channel at the top of the blog too.

2m agoTue 5 May 2026 at 5:25am

Chalmers says he’s looking forward, not back at 2019

As we’ve reported, changes to the capital gains tax discount and negative gearing are expected to feature in the budget next week.

Treasurer Jim Chalmers is asked if he thinks a one-off tax offset would be a sufficient trade off for the reforms, and if he should consider Bill Shorten’s suggestion the revenue should be funneled into tax cuts.

Chalmers says he doesn’t want to re-run elections past.

“My job is to make the right decisions for the right reasons in 2026, not to re-run the election of 2019,” he says.

“So I take seriously, the views that Bill expresses, from time to time, he’s entitled to his opinion. He obviously had a front row seat in that 2019 election. But my job is to look forward not back.”

2m agoTue 5 May 2026 at 5:25am

Chalmers won’t shut the door on tax offset for workers

Jim Chalmers took questions on reports a one-off tax break could be included in the budget.

The Australian on Tuesday reported Labor was preparing to announce an earned income offset of between $200 and $300 and only apply to earned income from work, rather than from investments.

Chalmers sticks pretty closely to lines the prime minister also gave us earlier today, saying that not all budget speculation is right.

“I don’t intend to add to that specific speculation today,” he says, adding people will need to wait until next Tuesday to find out more.

5m agoTue 5 May 2026 at 5:22am

How the RBA cash rate has been tracking

Here’s a chart of how the RBA cash rate has tracked to bring us here, to 4.35%:

As you can see, we’re back at the peak of the most recent rate hiking cycle, erasing the three rate cuts seen last year.

Read more from Gareth Hutchens:

9m agoTue 5 May 2026 at 5:18am

Third rate hike in 2026 will cost average borrower $2,661: Finder

Richard Whitten, home loans expert at Finder, says the RBA’s decision to hike the cash rate is a devastating blow for many homeowners already doing it tough.

“Being back at a 4.35% cash rate will feel like a big backward step for those with a mortgage,” he said.

“While this was the peak two years ago, the cost of living has continued to climb since then, meaning the same rate now carries a much heavier weight.

“Now is the time to explore your options. If you haven’t refinanced or asked your lender for a better deal, you’re almost certainly paying too much.”

Finder’s data has shown 39% of Australian homeowners say they are struggling to pay their mortgage in April. That’s up from 35% in January this year.

The decision to hike the cash rate in May will cost the average borrower an extra $2,661 a year (compared to what they were paying at the start of 2026), Finder says.

11m agoTue 5 May 2026 at 5:16am

Market snapshotASX 200: -0.5% to 8,658 points (live values below)Australian dollar: -0.2% at 71.50 US cents Dow Jones: -1.1% to 48,941 pointsS&P 500: -0.4% to 7,200 pointsFTSE: -0.1% to 10,363 points Spot gold: +0.5% at $US4,540/ounce Spot silver: +0.3% at $72.91/ounceBrent crude: -0.9% to $US113.38/barrel Iron ore: Flat to $US108.95/tonne Bitcoin: +1.2% at $US80,889

Prices current around 3:16pm AEST.

Live updates on the major ASX indices:

18m agoTue 5 May 2026 at 5:08am

Deposit rates set to rise alongside home loan rates

any info as yet on rising rates for us savers with large cash deposits

– jimmy

Hi Jimmy, yes, as we reported earlier, Macquarie Bank will lift deposit rates by 0.25 percentage points, following the RBA hike.

That’s alongside the increase in its variable home loan rates.

We’ll be reporting changes to savings and home loan rates as they are announced, and they’ll also be tracked here:

21m agoTue 5 May 2026 at 5:06am

Three consecutive rate hikes unwind relief of 2025: Deloitte

Australians have faced three consecutive rate hikes, unwinding the easing delivered in 2025 and returning the cash rate to post-pandemic highs, according to Stephen Smith, partner at Deloitte Access Economics.

There is now a credible risk that rates could rise to levels not seen for about 15 years, he says.

Mr Smith said today’s interest rate rise was all but inevitable, with underlying inflation running above the RBA’s target band since well before the conflict in the Middle East began.

“At the same time, the latest Statement on Monetary Policy, also released today, reveals that the RBA has further downgraded its medium-term growth outlook to just 1.4% – a historic low.

“The policy outlook has shifted materially in a short period. Avoiding an extended period of restrictive interest rates requires greater alignment between fiscal and monetary settings.”

Looking ahead, Mr Smith says next week’s federal budget will be critical.

“The government will need to demonstrate a genuine commitment to fiscal discipline and structural reform, rather than relying on broad-based, short-term cost-of-living measures that may provide temporary relief while adding to medium-term inflation persistence.

“Without reforms that lift productivity and expand supply-side capacity, an economy that was already operating near capacity before the Middle East conflict is likely to remain constrained. In that environment, inflationary pressures will be more difficult to contain, and the risk of further monetary tightening will remain elevated.”

Similarly, if public spending continues to support aggregate demand at current levels, the burden on monetary policy is likely to increase, Mr Smith continues.

“A credible reform agenda in next week’s budget would provide an important signal to the RBA and financial markets that fiscal and monetary policy are becoming more complementary.

“From here, the RBA will need to calibrate policy carefully against its dual mandate. As higher fuel prices continue to pass through into broader prices, underlying inflation will remain elevated.

“Whether additional tightening is required will depend on the extent to which recent rate increases and the global energy shock weigh on demand, activity and price formation in the coming months.”

24m agoTue 5 May 2026 at 5:03am

Your reactions to the RBA rate hike

How does making mortgage holders pay more money to banks impact the price of petrol? RBAs blunt instrument is wildly out of date.

– Dylan

Why do mortgage holders consistently bear the brunt of economic fluctuations? This doesn’t seem fair

– AJ

Increasing interest rates won’t slow inflation only heap more stress and cost on struggling families 😟

– Adrian

This hike will mean that I will be closer to not affording basic things. We are looking to start a family and this might just mean that it never happens for me. I am absolutely devastated.

– Golden

Despite all the wailing and gnashing of teeth, the data shows the average person continues to spend very freely. It might be the first experience of tightening their belts for some.

– Harsh

Reduce the deficit and cost of living by taxing the resources

– Ronald

It seems the RBA wishes to tackle inflation and not the looming recession. Shame on them.

– John

Thanks for your comments this afternoon. Clearly, a lot of people are feeling upset and financially stressed in the wake of the third rate hike of 2026.

Normally, we see a wider mix of views in the comments, but today’s sentiment is pretty overwhelmingly negative.

Undoubtedly, there will be questions on the topics you have all raised when the RBA governor speaks in about half an hour.

31m agoTue 5 May 2026 at 4:56am

Rate hike not a surprise: KPMG

Today’s latest rise will unfortunately not come as a huge surprise to many economists and the broader Australian public, KPMG chief economist Brendan Rynne has said.

As we reported earlier, the central bank has raised the cash rate for the third consecutive time this year, bringing it to 4.35%, the highest level since November 2023.

“RBA officials have spent much of the time since the last meeting in mid-March telling anyone and everyone that the cash rate was on the way up,” Dr Rynne said.

“The fundamental reason for this contractionary outlook is now less about an economy running above capacity and more about ensuring inflation does not become entrenched through expectations.

“Inflation remains far too high and is showing no signs of returning to the mid-point of the target band (2.5%) anytime soon.

“In this context, the RBA appears willing to accept the trade‑off that comes with tighter policy — namely higher unemployment and a greater risk of below trend growth, in order to preserve credibility and ensure longer‑term inflation expectations remain firmly anchored.”

36m agoTue 5 May 2026 at 4:51am

RBA unwinds last year’s rate cuts

The RBA’s new cash rate target is 4.35 per cent, up from 4.1 per cent.

Interest rates have now returned to the level they were in February 2025 before the RBA began its rate-cutting cycle last year, so last year’s policy easing has been fully unwound.

Today’s decision follows last week’s news that headline inflation accelerated sharply in March as surging automotive fuel prices (+32.8 per cent in March), sparked by the war in the Middle East, pushed much higher inflation into Australia’s economy.

Rates have been lifted three times this year (in February, March and May), but economists say the Reserve Bank Board may now want to wait a while to see how the economy responds before it moves rates again.

Business reporter Gareth Hutchens will be updating this comprehensive wrap:

39m agoTue 5 May 2026 at 4:47am

Muted market reaction to rate hike

There hasn’t been much of a reaction in the currency or stock markets.

The Australian dollar remains down against the greenback, but has slightly trimmed its losses, to 71.62 US cents.

The ASX 200 remains in the red, down 0.5%, where it has bounced around for much of the session.