In an interview on The Pay Off podcast, Reserve Bank of Australia Assistant Governor for Economic Sarah Hunter reiterated that inflation risks remain tilted to the upside and that the Monetary Policy Board may need to raise the cash rate again if those risks materialize. The board held the rate unchanged in August as it weighed persistent price pressures against slower economic growth and a housing downturn. The Bank forecasts inflation returning to target over the next two years, but Hunter emphasized uncertainty around that outlook. Current inflation pressures reflect higher oil prices linked to the Middle East conflict and domestic capacity constraints, while three previous rate increases are helping to slow demand. Hunter reported no systemic signs of household financial distress, with negative equity below its pre-COVID level and just over 40% of mortgage holders at least two years ahead on repayments. She also attributed rising rents mainly to demand outpacing housing supply rather than directly to higher interest rates.
2026-09-22Reserve Bank of Australia
Reserve Bank of Australia Assistant Governor Sarah Hunter flags upside inflation risks and potential for another rate increase
Reserve Bank of Australia Assistant Governor Sarah Hunter said inflation risks remain tilted to the upside and another cash rate increase may be needed if those risks materialize. Slower growth and a housing downturn supported the August decision to hold rates, while household finances show no systemic signs of distress.