The Bottom Line
Updated Thursday 22 October 2026
RBA Deputy Governor Andrew Hauser said on Wednesday that Australia's inflation outlook looks materially worse than the RBA projected in its August report and that community confidence in the central bank's ability to return inflation to target is eroding. The Guardian reports that market pricing of a fifth rate rise at the 3 November meeting rose sharply after Hauser's remarks.
The RBA has lifted the cash rate four times this year, from 3.60 per cent at the start of 2026 to 4.60 per cent now, a rise of one percentage point. ABS figures show headline CPI rose 4.0 per cent in the year to August 2026; the trimmed mean, the RBA's preferred measure of underlying inflation, is not yet published for August. CBA chief economist Luke Yeaman warned, as reported by MacroBusiness, that weak productivity and elevated public spending could keep inflation structurally higher and require a significantly higher cash rate than markets currently expect.
ABS labour force figures show the unemployment rate reached 4.72 per cent in September 2026, up from 4.08 per cent in January, its highest reading in the series this year. CBA's base case, as reported by MacroBusiness, is that rising unemployment and falling house prices will eventually bring inflation down and allow the RBA to pause.
On Caveat's scorecard, the National Housing Accord target moved to behind, on ABS figures for homes completed. MacroBusiness separately reports that Home Affairs Minister Tony Burke said it was disingenuous to judge past migration decisions with hindsight, declining to concede the government erred in allowing net overseas migration to surge after borders reopened.
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