That's now twice in two months the Reserve Bank has increased its cash rate, aimed at reining in inflation.
A 25 basis point hike was nearly consensus, however a few economists tipped a 40 basis point hike, which would have brought the cash rate to 0.75%.
RBA's 50 basis point hike came ahead of expectations and against the odds.
Reserve Bank Governor Dr Philip Lowe cited high inflation as reason for moving ahead of expectations.
"Inflation is expected to increase further, but then decline back towards the 2–3% range next year," Dr Lowe said.
"Higher prices for electricity and gas and recent increases in petrol prices mean that, in the near term, inflation is likely to be higher than was expected a month ago.
"As the global supply-side problems are resolved and commodity prices stabilise, even if at a high level, inflation is expected to moderate. Today's increase in interest rates will assist with the return of inflation to target over time."
This now takes Australia's monetary policy out of emergency status.
"The resilience of the economy and the higher inflation mean that this extraordinary support is no longer needed," Dr Lowe said.
The RBA has not adjusted the cash rate target by more than 25 basis points at a single meeting since 2012, and has not increased by more than 25 basis points since February 2000.
Last week, Westpac chief economist Bill Evans said 40 basis points would have been the "right decision" to rein in inflation and take Australia out of emergency stimulus status.
Gareth Aird, CBA's head of Australian economics, previously said the RBA will persist with a 25 basis point hike in June because it does not want to be seen as changing its economic outlook after the federal election.
The RBA is expected to leave 2022 with a cash rate of 1.50% to 1.75%.
PropTrack economist Paul Ryan said despite still being early days, interest rate talk is already weighing on property prices.
"Higher interest rate expectations have weighed on housing price growth across the country in 2022. Housing price growth has slowed significantly, with annual price growth falling from 24% six months ago to only 14% in the year to May," Mr Ryan said.
"This slowdown has particularly affected the most expensive capital markets of Sydney, Melbourne and the ACT, which recorded price falls in May."
"RBA increases cash rate by 50 basis points, ahead of expectations" was originally published on Savings.com.au and was republished with permission.