Hauser says Q3 trimmed mean to exceed RBA forecast, capacity tighter

Signalling that the trimmed mean will exceed expectations a week before the CPI numbers come out is a rare explicit move, and it tilts the odds for 28 October towards a positive surprise for inflation. Together with his assessment that capacity constraints are greater than the RBA had factored in, the statements are apt to solidify pricing for a rate hike on 3 November, which would likely buoy the Australian dollar and push up shorter-term Australian bond yields. His supply-shock remarks carry weight for the oil connection: they imply the RBA is less willing to let energy-led price increases pass while inflation expectations are fragile, so crude becomes a more immediate factor in Australian rate setting. Weaker labour data provides ammunition for the dovish camp, but Hauser’s framing suggests it alone is insufficient to stop the Board from raising rates.

---

The RBA's 2026 meeting schedule puts the next session just weeks away:

-

Hauser has effectively foreshadowed a strong underlying inflation reading, and with capacity tighter than previously thought and supply shocks no longer being looked past, the weaker labour figures seem a minor detail, not the respite they might have been.

In summary:

• The quarterly trimmed mean is likely to come in above the RBA's projection, Hauser noted.
• Capacity pressures are running higher than the RBA anticipated, he said.
• The RBA must respond to supply shocks to stop inflation expectations from shifting, according to Hauser.
• While monetary policy cannot be set for current inflation, current inflation still matters for expectations.
• September employment data was a bit below forecasts; the jobless rate remains low but the labour market is cooling.
• Third-quarter CPI figures are out on 28 October, before the RBA's decision on 3 November.

Further remarks from RBA Deputy Governor Andrew Hauser, who indicated that the September quarter's underlying inflation is on track to exceed the bank's forecasts, building on his prior statements that the inflation picture is more serious than expected.

Speaking in Sydney at Citi's Australia and New Zealand Investment Conference, Hauser said the quarterly trimmed mean seemed poised to come in above the RBA's prediction. The trimmed mean excludes the highest and lowest quarterly price moves to provide a purer measure of underlying inflation, and it is the RBA's most-watched gauge. His comment was made a week ahead of the publication of the September quarter CPI by the Australian Bureau of Statistics on 28 October.

Hauser also said capacity pressures are more intense than the RBA had expected, implying that demand continues to outstrip supply by more than officials projected.

On supply shocks, Hauser stated that the RBA must take action on them to keep inflation expectations rooted. Central banks ordinarily look past supply-induced price increases on the assumption they will recede, but his remarks indicate the RBA now has less leeway to do so following an extended stretch of elevated inflation. The RBA has earlier referenced the Middle East war and its impact on oil costs as a supply-side factor.

He added that because monetary policy operates with a delay, it cannot be directed at current inflation, but he stressed that current inflation is not unimportant, as sustained price increases can affect expectations.

The jobs data provided a partial counterweight. Hauser said the September employment report was definitely slightly below forecasts, and while joblessness is still low, the market is softening.

The RBA increased its cash rate to 4.60% on 29 September. The Board holds meetings on 2 and 3 November, with the decision announced at 2:30pm Sydney time on 3 November (03:30 GMT, 22:30 ET on 2 November), along with revised staff projections. A trimmed mean reading above expectations in the coming week would probably keep another rate increase squarely on the agenda.