This first rise in rates for 18 months begins to change the political landscape. If it is followed by others, it could transform it. The choices facing voters would become much more stark: the wedge or the wallet?
Recent history gives a clue to the impact of these fear factors.
The last time interest rates rose - in two 0.25 percentage point steps in May and June last year - the polls started to turn Labor's way within six weeks. By mid-July, Labor had gone from 4 points behind to a rare, narrow two-party preferred lead.
But in mid-October - after the Bali bombings and amid swirling fears of possible terrorist attacks on Australian soil - the Coalition snapped back to a 10 per cent lead.
It's easy to see why the Howard Government is again whipping up national security and border protection. And if rates continue rising, watch that whip crack a lot harder.
The issue the opposition and minor parties should be arguing a lot more is that the Howard government is not terribly good at the War on Terror. Why was Brigitte sent back to France without any serious investigation? And why did Attorney-General Ruddock then claim that the drastic powers which went through parliament unamended were too weak because of Labor's intransigence? And, for that matter, why were the Taliban and al-Qa'ida not proclaimed as enemies of the Commonwelath so that Hicks could be prosecuted for treachery in Australia?