What happened
Reserve Bank of Australia Deputy Governor Andrew Hauser warned that policymakers will raise interest rates again if inflation risks crystallise. Speaking after the RBA held the cash rate steady at 4.35%, Hauser identified Middle East supply disruptions, the global artificial intelligence boom, and poor productivity as key upside risks to domestic inflation forecasts.
Why it matters here
While equity markets anticipate a rate pause, central bank officials remain vigilant against lingering inflationary pressures. An additional rate hike to 4.60% would further increase mortgage stress and compress valuation multiples for growth-oriented domestic stocks. Investors must factor extended tight monetary policy into income and fixed-income portfolio allocations.
What to watch
Upcoming Australian quarterly inflation readings and Reserve Bank of Australia Board policy meetings leading into December.
Source
reuters.com