All eyes are on next week’s federal budget, to be delivered by Treasurer Jim Chalmers come 7:30pm Tuesday night.

For those working at Parliament House, there’s one dead giveaway that the budget is approaching - the leaves of the ‘budget tree’ turn red. You’d recognise the tree from press conferences around budget time - as exhibited here by Mr Chalmers, it makes for some slightly awkward photo opportunities.

Shares in major fast food chains have fallen sharply in recent months, as Australians cut back on spending amid cost of living pressures.

Now, you might be thinking: doesn’t fast food become more popular when budgets are tight?

Well, while fast food has traditionally held up during economic downturns, new data suggests even these cheaper options are no longer immune to household budget pressures.

Here’s what to know.

Shares in several fast food companies, including Domino’s Pizza, KFC and the multi-brand owner Retail Food Group, have dropped more than 10% over the past two months.

Domino’s Australia is down more than 20% since late February, including a 10% fall in a single session last week, after its U.S. business reported a weak start to the year.

Retail Food Group, which operates brands including Donut King and Gloria Jean’s, has seen its shares fall more than 40% this year.

Meanwhile, Collins Foods, which runs KFC in Australia, is down around 25% over the past six months.

Most ASX-listed companies report earnings twice a year, meaning the full impact may not be clear until full-year results are released in August.

The hospitality sector more broadly is feeling the impact of cost of living pressures.

A survey by National Australia Bank found that nearly half of Australians were already cutting back on coffee spending last year – a trend that appears to be continuing.

Fast food has typically performed well during economic downturns, as consumers trade down from more expensive dining options.

But the current pullback suggests even fast food is becoming less affordable for some households.

Analysts say this reflects broader concerns that prices in the sector have risen faster than what consumers are willing – or able – to pay.

Reporting by Lachlan Keller.

Shares and tax: what you need to know

Making money from shares? You’ll need to think about taxes that may apply. Profits from selling shares are subject to Capital Gains Tax (CGT), while dividends are added to your assessable income. If you hold shares for over 12 months you may be eligible for a CGT discount or might be able to use franking credits to reduce what you owe.

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^{Information is general in nature. Investing carries risk. To find out more, you can visit commsec.com.au}

The Reserve Bank of Australia (RBA) increased the cash rate from 4.1% to 4.35% at its May meeting on Tuesday.

The move comes as the central bank continues to balance efforts to curb inflation against growing pressure on mortgage holders.

In its statement, the RBA said the U.S-Israel war with Iran has “resulted in sharply higher fuel... adding to inflation.”

Here’s what you need to know about the latest decision.

The cash rate is the interest rate the RBA charges banks for short-term loans.

We usually refer to changes in the cash rate as the RBA changing interest rates, because the cash rate affects interest rates across the economy, including home loans.

That means higher rates make it more expensive to borrow, increasing mortgage repayments for households.

Eight members of the RBA Board voted to increase the rate to 4.35%, while one voted to leave it unchanged.

The latest announcement marks the RBA’s third rate hike in a row, after holding steady across the four meetings prior to that.

Australia’s central bank was among the first major economies to begin lifting rates earlier this year post-pandemic, as inflation started to pick up.

Since then, the U.S–Iran war has added further pressure to an economy already grappling with rising prices.

All four of Australia’s “Big Four” banks – CommBank, NAB, ANZ and Westpac – had predicted this rate hike.

Westpac now expects two more hikes in June and August, which would take the cash rate to 4.85% by the end of the year.

The RBA closely watches “underlying” inflation – a measure that strips out volatile price swings like fuel. That measure, known as the trimmed mean, was at 3.3% in March. This is outside the RBA’s target range of 2-3%.

Headline inflation – which includes price swings in items like petrol – is increasing at a faster rate, with prices climbing 4.6% over the year to March, up from 3.7% in February.

That was inflation’s highest level since September 2023.

At the same time, the RBA is walking a tightrope between trying to bring inflation down without tipping the economy into recession.

After the bank’s meeting, the board said: “Higher fuel prices are adding to inflation and there are indications that this is likely to have second-round effects on prices for goods and services more broadly.

“This inflation impulse is in addition to the high inflation recorded around the start of 2026, reflecting capacity pressures in the economy.”

Filip Tortevski, senior analyst at trading education company Wealth Within, told The Daily Aus that continued interest rate hikes risk tipping the Australian economy into recession.

Australia’s economy has been growing at around 2.6% annually, but has only just recovered to that level – highlighting how sensitive it is to higher rates.

He said the RBA is trying to stop a supply-driven shock from spreading across the broader economy, but warned it risks placing further strain on households without addressing the root cause of rising prices.

Interest rates are generally more effective at curbing demand-driven inflation, where prices rise because of strong spending.

The most immediate impact for regular Aussies will be felt for mortgage holders. When the cash rate increases, the interest rates that banks charge on loans will also increase.

This will also impact renters as landlords might pass the increased costs of their mortgages on to renters.

Housing data firm Cotality says that rental prices have increased an average of $200 per week over the past five years.

Reporting by Lachlan Keller.

“Set and forget” doesn’t mean never checking in

ETFs are often used for long-term investing – but it’s still worth reviewing your portfolio occasionally.

Your goals might change, markets move, and some investments may grow faster than others. That’s where rebalancing comes in.

The key is staying disciplined: learn from performance, but avoid making emotional decisions during market ups and downs. Over time, ETFs can become the building blocks of a portfolio that grows with you.

^{Disclaimer: Information is general in nature. Investing carries risk. To find out more, you can visit commsec.com.au}  

Bigger dresses, bigger names, bigger price tags. The Met Gala returned this week – and it was as over-the-top as ever.

Tickets are now estimated to cost around $US100,000 ($AU140,000), up roughly $25,000 in just one year.

With a theme of Fashion Is Art, the event doubles as a major fundraiser for the Metropolitan Museum of Art’s Costume Institute in New York.

What started as a modest fundraiser in 1948 has grown into one of fashion’s biggest nights, drawing more than 400 A-list guests from around the world.

Reporting by Lachlan Keller.