Reserve Bank of Australia Deputy Governor Andrew Hauser said the September-quarter trimmed mean likely will exceed the bank’s August projection, sharpening the focus on its Nov. 3 rate decision.
At a Sydney conference on Oct. 21, Hauser said only a large downside surprise in the final month’s data would change that view. The RBA is still completing its forecasts, and he did not signal how the Monetary Policy Board will vote. He said members would weigh what the full quarter shows about underlying price pressure instead of letting one reading determine policy.
Hauser cited oil prices roughly one-third above the level assumed in August, rising technology-related prices and tighter domestic capacity as risks. He said recent inflation results had been at or slightly above expectations even as labor conditions eased. The RBA’s August outlook cited earlier oil shocks as examples of energy costs spreading into other prices.
Australia’s annual consumer price inflation was 4.0% in August, while the Australian Bureau of Statistics (ABS) reported trimmed mean inflation at 3.6%. The RBA’s target is 2% to 3%. Seasonally adjusted unemployment increased 0.1 percentage point to 4.7% in September, the ABS said.
In August, the RBA projected trimmed mean inflation would remain above 3% until mid-2027 before easing to 2.5% by early 2028. On Sept. 29, its board raised the cash rate target by 25 basis points to 4.60% and said it could raise it further if needed.
Hauser described the policy trade-off as “a world of hard choices.” He said persistent inflation weighs especially heavily on low-income renters, while higher interest rates put mortgage holders under pressure and risk weakening economic activity and employment. He also warned that rising inflation expectations could make price growth harder to contain later. The remarks follow an earlier warning from Hauser about November rate-hike odds.
The September CPI release is scheduled for Oct. 27 at 8:30 p.m. ET (Oct. 28 at 11:30 a.m. AEDT). The RBA is due to announce its decision and updated forecasts on Nov. 2 at 10:30 p.m. ET (Nov. 3 at 2:30 p.m. AEDT).
