What happened
Money markets have priced in a more than 60% probability of a Reserve Bank cash rate increase at its November meeting following hawkish comments from Deputy Governor Andrew Hauser. Hauser warned the inflation outlook had worsened, with headline inflation reaching 4.0% in August. Betashares expects September quarter trimmed mean inflation to hit 1.0%, exceeding the RBA's 0.8% forecast.
Why it matters here
Another 25 basis point increase would elevate the official cash rate to 4.85%, its highest level since late 2011. Rising borrowing costs continue to squeeze household budgets, damp real estate demand, and raise funding costs for listed Australian businesses, while shifting equity market valuations across rate-sensitive sectors.
What to watch
The release of the September quarter Consumer Price Index data on Wednesday, which will determine whether the Reserve Bank board acts at its November meeting.
Source
news.com.au