US Federal Reserve’s move will lift Australian interest rates too

Australia’s Reserve Bank may be on hold this year, but the latest US Federal Reserve interest rate hike will push up your mortgage costs.

It’s no surprise that the Federal Reserve put up US interest rates by 25 basis points, but what may catch some Australians off guard is the flow-on effect here.

It’s only the third US rate increase since the height of the global financial crisis, but this one has come just three months after the previous hike and sooner than markets expected at the beginning of the year.

Australian borrowers won’t escape unscathed. They should be prepared for the fallout of higher interest rates here too.

The US ten-year bond rate serves as the platform for global interest rates and is a rough indicator of bank funding costs.

Source: US Federal Reserve’s move will lift Australian interest rates too – ABC News (Australian Broadcasting Corporation)