RBA’s Hunter Says Rate ‘Not Quite Yet’ Done Fighting Inflation

The Reserve Bank of Australia is “not quite yet” done fighting inflation, said Assistant Governor Sarah Hunter, signaling another rate hike is likely when policymakers meet early next month.

“The board have put through four rate hikes this year to keep on tackling the challenge” of inflation, she said in a 60 Minutes interview aired on Nine Network on Sunday, focused on the impact of higher rates on consumers and home prices.

“Unfortunately, not quite yet,” she responded when asked if the RBA had already done enough to tame inflation. “I’m not going to front run what the board might or might not do with interest rates. All I do know is that they are committed to tackling inflation and getting inflation down.”

Expectations for a rate hike at the Nov. 3 decision had already elevated earlier in the week, after Deputy Governor Andrew Hauser on Wednesday said the inflation outlook is “materially worse” now than the bank’s August assessment.

The Reserve Bank is beginning to see higher oil prices, linked to the ongoing US-Iran war, become more embedded into some supply chains.

“We think that there’s a bit more of that to come unfortunately,” said Hunter, who oversees economic forecasting at the central bank.

The RBA lifted interest rates in late September to the highest level in 15 years at 4.6%. Another rate rise would add more downward pressure on property prices.

“We’re not seeing that create financial stress systemically across the system,” she said, referring to the fall in house prices.

Australia’s housing market has been pummeled by higher borrowing costs and tax changes in the May budget that removed concessions for property investors.

That’s spilled over into weaker demand, with Australia’s home auction clearance rate across the combined capitals slightly below 48% last week, compared with about 67% for the same period last year, according to property consultancy firm Cotality.

Australia’s next consumer price data due Wednesday is expected to show trimmed mean inflation in third quarter rose 3.6%, similar to the previous quarter’s rise.

RBA Governor Michele Bullock and other policymakers are scheduled to appear in parliament the same day.