RBA raises interest rate

The RBA raised its official interest rate again today. Bloomberg reports:

Australia’s central bank raised its benchmark interest rate to 4.25 percent and signaled further increases, dismissing warnings that higher borrowing costs are already eroding consumer spending.

Governor Glenn Stevens boosted the overnight cash rate target from 4 percent, the Reserve Bank of Australia said in a statement in Sydney today. The fifth increase in borrowing costs in six meetings was predicted by 13 of 23 economists in a Bloomberg News survey.

The Federal Reserve, in contrast, will probably take its time in raising rates, although Monday's economic data did not provide any reason to be concerned about the economic recovery. Again from Bloomberg:

Service industries expanded in March at the fastest pace since May 2006, indicating the U.S. recovery is spreading beyond manufacturing and starting to create jobs.

The Institute for Supply Management’s index of non- manufacturing businesses that make up almost 90 percent of the economy rose to 55.4, higher than anticipated, from 53 in the prior month. Readings above 50 signal expansion...

More Americans signed contracts in February to buy previously owned homes, according to the National Association of Realtors. The index of purchase agreements, or pending home sales, rose 8.2 percent, the second-biggest gain on record and the largest since October 2001.