What the US interest rate hike means for Oz, and a bickie hack...
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How will the US Federal Reserve’s interest‑rate hike affect Australian borrowers and savers?
This is a squee podcast. Where your shortcut to being informed. Good morning, I'm Anna Pikett, and I'm Larissa Huntington. It's Friday, the 18th of September. In your Squiz Today, the US hikes interest rates, the federal government lays out its migration plan, a crocodile-infested river is given the green light for the Brizi Olympics, and get ready for Fat Bear Week. This is your squiz today. We've talked a lot about inflation and rising prices over the last few months. It's something several countries, including us here in Australia, are trying to push down. And it's the reason the US Federal Reserve jacked up interest rates yesterday. Larissa, this made news all over the world because it's the first time the US Central Bank has increased rates in three years.
Yeah, that's right. The last time was back in July 2023. Now, the new chair of the Federal Reserve, Kevin Walsh, said that it was a responsible thing to do because the US economy's been dealing with years of high inflation, which economists say hasn't been helped by the Iran war and the president's tariff regime. And while we're talking about US President Donald Trump, it's fair to say Anna, he wasn't happy about it. He's been calling for rates. To be cut for months. And you might remember he consistently attacked the previous chair of the Federal Reserve for not dropping rates, and yesterday's announcement was seen as a bit of a surprise in some ways.
Yeah, not from an economic perspective, but because when Walsh was being considered to take over as chair of the Federal Reserve last year, he kind of indicated he was keen for rate cuts too, but he's done the exact opposite of what the president has been calling for by raising rates twenty-five basis points to between three point seven five and four percent. Now this is something central banks do to try and slow down spending and encourage people to save.
And in terms of what it means, it'll make borrowing more expensive for Americans who want to secure loans, mortgages, and credit cards. But it also, on the flip side, means that people can get better returns on their savings. And like here in Oz, cost of living pressures have been a hot topic over there. And with the midterms just around the corner, high prices will be top of mind for many voters. And the conversation here led to what we might be likely to see when. when the Reserve Bank meets later this month. And the general consensus is that the RBA will raise interest rates because we're also dealing with some stubborn inflation.
Right. Um, we also heard from the International Monetary Fund yesterday. It's told federal and state governments to cut spending to try and get on top of these rising prices. And it's also downgraded its forecast for Australia's economic growth in 2027. This all puts pressure on Federal Treasurer Jim Chalmers, who wants to convince voters that living standards are improving under his government. And we're gonna get an update on this next week when Chalmers releases his latest intergenerational report, so you can expect to hear more about this in the days to come. We're gonna go back overseas now because European Commission President Ursula von der Leyen has proposed inviting Canada to be the bloc's first associate member, which would bring it closer on things like defence, energy security and critical minerals.
Yeah, this comes after trade talks between Canada and the US broke down last month, with each one imposing tit for tat tariffs on the other. These trade tensions have been going on since Trump took office for his second term, and Canada's PM Mark Carney has been casting around for other trade options. So US President Donald Trump hasn't reacted very well to this plan. He said it was laughable, and he said that the US would whack very serious tariffs on Europe if it happened. Bakarney said it wasn't about creating a new geopolitical bloc to, in his words, become a great power rival, only with better manners, but rather to build resilience for his country.
Yeah, von der Leyen has also hinted that Australia could follow suit, saying, In such times of uncertainty, having friends matters.
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Chapters
3 chapters
1
How will the US Federal Reserve’s interest‑rate hike affect Australian borrowers and savers?
0:00–5:34
2
What does the new Australian migration plan mean for temporary visa holders and families?
5:34–14:09
3
Why is the Fitzroy River being approved for Olympic rowing despite crocodiles?
14:09–15:23