RBA's Hunter signals inflation task unfinished, fifth rate hike in view

At the margin, the remarks should underpin the Australian dollar via rate differentials and keep short-dated government bond yields high, as markets tilt further towards a November increase unless Wednesday's inflation data come in lower than expected. Oil prices remain the deciding factor: a fresh escalation in the US-Iran war that pushes crude higher would amplify the RBA's worry about second-round effects and make tightening beyond November more likely. On the other hand, a sustained fall in crude would allow the board to indicate a pause after its next move. On the ASX, property and consumer discretionary stocks remain sensitive to a higher-for-longer policy stance.

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Earlier article:

• Asia economic and event calendar for Monday, October 26, 2026, with an RBA speaker scheduled shortly

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After four rate increases, the RBA's head of forecasting stated the task is incomplete, as war-related oil costs infiltrate supply chains, and a fifth rise appears probable on November 3.

Recap:

• In a television interview broadcast on Sunday evening Australian time, RBA Assistant Governor Sarah Hunter said the bank had “not quite yet” done enough to bring inflation under control.
• She refrained from preempting the board's decision but stated policymakers stay committed to reducing inflation; the next meeting falls on November 3.
• Hunter indicated that higher oil prices resulting from the US-Iran conflict are starting to become embedded in certain supply chains, with further effects anticipated.
• Deputy Governor Andrew Hauser, who spoke on Wednesday, said the inflation outlook is materially worse than the bank's August assessment.
• The cash rate is at 4.6%, the highest in 15 years, following four increases this year; Hunter noted that declining house prices are not leading to systemic financial strain.
• Third-quarter CPI data is scheduled for release on Wednesday, with trimmed mean inflation forecast at 3.6%, roughly in line with the previous quarter.

Reserve Bank of Australia Assistant Governor Sarah Hunter stated that the central bank has not completed its battle against inflation, strengthening expectations that policymakers will increase interest rates again at their meeting on November 3.

< p>Hunter, speaking in an interview with Nine Network's 60 Minutes that aired on Sunday evening Australian time, noted the board had implemented four rate hikes this year to address ongoing price pressures. When asked if those increases had been sufficient to control inflation, she responded “not quite yet.” She refused to anticipate the board's forthcoming decision but emphasised that policymakers are still dedicated to lowering inflation.

These comments follow those of Deputy Governor Andrew Hauser, who on Wednesday stated the inflation outlook had worsened materially since the bank's August assessment. That had already increased market expectations of a rate rise at the November meeting.

< p>Hunter, who heads economic forecasting at the RBA, highlighted the continuing US-Iran war as a source of renewed pressure. She said higher oil prices tied to the conflict are starting to become embedded in some supply chains, and added that the bank expects further pass-through. This indicates the RBA is growing more worried that the energy shock is extending beyond fuel prices into the wider cost base of the economy, which would make inflation more entrenched and harder to reduce.

The RBA raised its cash rate in late September to 4.6%, a 15-year high. Another increase would put additional downward pressure on Australian property prices, which are already declining. Hunter stated that the fall in house prices has not yet caused systemic financial stress, indicating that the bank does not view housing weakness as a reason to delay.

Focus now shifts to Wednesday, when Australia releases its third-quarter consumer price data. The trimmed mean measure of core inflation is forecast at 3.6%, largely unchanged from the prior quarter. Governor Michele Bullock and other policymakers are also due to appear before parliament that day, providing another chance to outline their views before the decision. A figure matching expectations, together with the oil-related pressure Hunter detailed, would probably make a November increase the market's baseline scenario.

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< p>On the same day the CPI data is due, top RBA officials are set to appear before parliament: