Rate hike and more to come?; Anthropic float hits Australia; one man’s 50,000km walk

Rate hike and more to come?; Anthropic float hits Australia; one man’s 50,000km walk

News in brief

Social media ban faces High Court challenge: Australia's world-first social media ban for children under 16 is being challenged in the High Court. Digital rights advocates argue the restrictions infringe freedom of political communication, while Reddit has raised concerns about privacy and political rights.

 

David Jones misses another reporting deadline: David Jones has missed another deadline to lodge its financial accounts, adding to concerns about the struggling department store. The retailer is negotiating rent relief and plans to shrink its network from 38 stores to between 12 and 20.

 

CommSec opens door to Anthropic's record float: Retail investors are being invited to participate in AI giant Anthropic's proposed $US100 billion sharemarket float. CommSec is encouraging clients to open international trading accounts, while eight Australian brokers and investment platforms have been appointed to distribute shares.

 

US midterms could weaken Trump's power: Americans are voting in crucial midterm elections, with Democrats favoured to gain control of both chambers of Congress. A Democratic victory would make it harder for President Donald Trump to pass legislation and advance his domestic agenda, although he would retain significant authority over tariffs and foreign policy.

 

Adventurer completes extraordinary 28-year walk: British adventurer Karl Bushby has finally returned home after a 50,000-kilometre journey from South America to England that began in 1998. His remarkable trek crossed four continents and included swimming the Bering Strait and English Channel. Visa problems, financial difficulties and the pandemic stretched the journey to 28 years.

Fear-o-meter

From the RBA Statement on Monetary Policy:

 

Since the previous meeting, the data have confirmed that underlying inflation remains broadly based. Capacity pressures appear a little tighter than previously estimated and there are indications that higher fuel prices are being passed through to prices of other goods and services. Inflation is now expected to remain above 3 per cent for the coming year and there is an increasing risk that higher inflation expectations will become embedded.

 

The Board is conscious of the period in which inflation has been too high. Given the revised inflation outlook and the continuing upside risks, the Board judged that a further tightening in financial conditions is warranted to support the return of inflation to target.

 

The Board will continue to do what it considers necessary to bring inflation sustainably back to target. Accordingly, the Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. Monetary policy is well placed to respond to developments, and the Board is focused on its mandate to deliver price stability and full employment.

 

Today’s policy decision was by majority: six members voted to increase the cash rate target by 25 basis points to 4.85 per cent; three members voted to leave the cash rate target unchanged at 4.60 per cent.

Fear & Greed Q+A today

On how Aussie businesses can move from AI fear to action - and why the first step is onboarding AI like a new employee:

 

"We really need to build knowledge. We really need the executive leadership team to be using the tools. We need that to flow through the organisation. I really do believe it's an executive-first approach here, and we need to really embrace that.

 

We need to create discipline in our organisation. What's the governance look like around AI? How do we make sure that we have the right forums in place to manage that?

 

We have spent a lot of time as an industry somewhat trying to integrate AI. I would suggest actually what we need to do is think more about onboarding it. How do we onboard it as a capability rather than an integration?

 

And I think when you change that mindset, it actually creates this: how do we put guardrails in? How do we stop it from accessing data that we probably wouldn't normally let all of our organisation get data access with? How do we control what it does every day?"

RBA lifts rates to 18-year high, with more pain possible

 

The Reserve Bank has lifted interest rates for the fifth time this year, taking the cash rate to 4.85 per cent, its highest level since November 2008. And there could be more increases to come.

 

The RBA has significantly upgraded its inflation forecasts, warning that rising fuel and commodity prices, domestic capacity pressures and growing business costs will keep inflation above its two to three per cent target range for another year.

 

The decision wasn't unanimous, with six board members voting for an increase and three preferring to hold rates steady. Financial markets now put the probability of another hike at around 50 per cent.

 

RBA governor Michele Bullock acknowledged that economic growth was slowing and households were under considerable pressure. While the central bank isn't forecasting a recession, she conceded many Australians would feel as though they were experiencing one.

Greed-o-meter

Loan size	November hike $/mth	Five hikes $/mth
$500,000	77	380
$600,000	92	456
$700,000	107	532
$800,000	123	607
$900,000	138	683
$1 million	153	759

Source: Canstar. Based on an owner-occupier principal and interest loan with 25 years remaining in February 2026, at the RBA average variable rate.

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The latest rate rise means even more pressure on household budgets. According to Canstar, a borrower with a $600,000 mortgage will now be paying an extra $456 a month compared with the start of the year – almost $5,500 annually. For those with a $1 million mortgage, the increase is $759 a month, or more than $9,100 a year.

Listen to today's episode 🎧 

As shown above, another rate hike means millions of Australians are facing even more pressure on already stretched household budgets. So today, we're recommending a new special episode of our sister podcast, How Do They Afford That?

 

Michael Thompson and financial planner Canna Campbell have put together a practical mortgage survival guide, looking at what you can actually do when repayments are getting harder to afford.

 

Listen to Your Mortgage Survival Guide on How Do They Afford That here: