In a 60 Minutes interview published by the Reserve Bank of Australia, Assistant Governor (Economic) Sarah Hunter described how an overseas oil shock and domestic demand above sustainable supply were keeping inflation elevated. The Board had raised interest rates four times in 2026, but monetary policy needed more time to work, while further cost pressures were expected as higher oil prices spread through supply chains. Inflation had declined over recent years before rising again, reflecting both domestic pressures and the oil shock. Higher interest rates were intended to bring demand back into balance with supply and prevent imported inflation from becoming embedded. Government spending contributed to demand and was incorporated into the bank’s forecasts, but Hunter rejected a role for the central bank in prescribing government spending or tax choices. Economic data and business liaison did not indicate a recession, and a sharp downturn was not the bank’s baseline forecast. Although some borrowers faced severe financial pressure, many had savings buffers, and there was no evidence of widespread mortgage repayment difficulties or systemic financial stress from falling house prices. Hunter declined to signal the Board’s next interest rate decision or provide a firm timetable for inflation pressures to ease.
Reserve Bank of Australia outlines persistent inflation pressures from oil shock and excess domestic demand
In a 60 Minutes interview, Reserve Bank of Australia Assistant Governor (Economic) Sarah Hunter identified the overseas oil shock and excess domestic demand as continuing sources of inflation pressure. Four interest rate increases in 2026 needed time to take effect, while higher oil costs were still spreading through the economy. She reported no signs of recession or widespread mortgage repayment stress, but offered no timetable for relief or signal on the next rate decision.