RBA's Hauser Warns Inflation Outlook Worse Than Forecast

Reserve Bank of Australia Deputy Governor Andrew Hauser said on Wednesday the inflation outlook is running a little above the central bank's own forecasts, with the cash rate at 4.60% after a unanimous 25 basis point hike on 29 September and the next decision due at 2.30pm Sydney time on 3 November. Hauser spoke at a fireside chat at Citi's Australia and New Zealand Investment Conference in Sydney, less than two weeks before the Board meets, and said he could not pre-announce what the Board will decide.

Context — Why Hauser's Inflation Warning Matters Before 3 November

The 29 September move was the fourth increase of 2026 and it was unanimous, which matters because it shows the Board was already aligned before Hauser's latest remarks. Hauser has been among the RBA's most consistent voices on inflation this year, previously calling it the bank's one big problem and pointing to the Middle East conflict, an artificial intelligence-driven global boom and weak supply capacity as drivers.

Those three drivers have not resolved. Energy prices remain a wildcard, and the RBA has previously cited the Middle East conflict and its effect on oil as a complication layered on top of domestic demand pressures. That is the backdrop against which Hauser now says the outlook has worsened rather than improved.

Hauser stressed that inflation has been high for a very long time and that the RBA cannot allow inflation expectations to move away from its target. That framing shifts the debate from the current price level to the risk of entrenchment, which is a harder problem for a central bank to reverse once it takes hold.

He also said businesses are reporting cost pressures as their number one problem. That is a supply-side signal, not a demand-side one, and it suggests firms are still passing costs through rather than absorbing them.

For Australian rates markets, the practical effect is that November stays live. The Australian dollar and short-dated Australian yields would tend to find support if markets add to hike pricing, while the doves retain a foothold through Hauser's acknowledgment that labour market and housing data are slowing. Live positioning across FX and rate markets is tracked on the Fazen Markets dashboard.

Data — What the Numbers Show

Hauser gave no revised inflation figure, and he said staff forecasts are still being finalised. The Board will receive a fresh set of RBA economic projections at the November meeting, which will show how far the inflation outlook has shifted.

The hard numbers that are confirmed:

Item	Value
Cash rate	4.60%
Last move	+25 bps, 29 September
2026 hikes to date	Four
Next decision	3 November, 2.30pm Sydney (03:30 GMT, 22:30 ET on 2 November)
Q3 CPI release	28 October

Before/after on the policy stance: the cash rate sat below 4.60% before 29 September, and the unanimous vote took it to 4.60%. That is the level Hauser is defending with his comments, and it is the level markets will price against into the CPI print.

Hauser said he acknowledged some slowing in labour market and housing data and that monetary policy is working. That is the one piece of softening evidence in an otherwise firm set of remarks, and it gives the doves something concrete to point to.

The comparison that matters most is between the September decision and the November one. In September, the Board had a full set of data and voted unanimously to hike. In November, it will have the Q3 CPI plus updated staff forecasts, and Hauser has now flagged that the inflation outlook itself has deteriorated since the last set of projections.

Analysis — What It Means for the AUD, Yields and Rate Pricing

A hawkish read on Hauser keeps a further rate rise in play for 3 November. The transmission runs through two channels. First, short-dated Australian yields would push higher if markets add to hike pricing, because the front end of the curve reprices fastest when the near-term policy path shifts. Second, the Australian dollar would tend to be supported, since a higher expected cash rate widens the carry advantage.

The equity exposure sits in rate-sensitive domestic sectors. Australian banks, listed property trusts and consumer-facing discretionary names carry the most direct sensitivity to a higher cash rate path, because their earnings and valuations are discounted against it. Exporters and miners are less directly exposed to the domestic rate path and more exposed to the global demand drivers Hauser cited, including the AI-driven investment boom and energy costs.

The counter-argument is real. Hauser acknowledged slowing labour market and housing data and said monetary policy is working. If the Board reads those softening signals as sufficient, it can hold at 4.60% and wait. He also explicitly declined to pre-announce, saying staff forecasts are still being finalised and that he does not know for certain what the Board will decide.

Positioning is likely split. Hawks will point to the expectations warning and the cost-pressure survey evidence. Doves will point to the labour and housing slowdown. The September vote was unanimous, so the burden of proof for a hold falls on the incoming data rather than on any known dissent within the Board.

Outlook — What to Watch Before 3 November

The decisive input is September-quarter CPI on 28 October, the last key data point before the Board meets on 2 and 3 November. An upside surprise would strengthen the case for a fifth rate rise this year, given Hauser has already said the outlook has worsened.

The November meeting itself carries the fresh RBA economic projections. Those forecasts will quantify how far the inflation outlook has moved, which is information Hauser did not provide in Sydney.

Energy prices are the wildcard to monitor. The RBA has previously linked the Middle East conflict and its effect on oil to the inflation problem, so any renewed move in crude feeds directly into the domestic cost picture. Australian dollar and short-dated yield levels into the CPI print are the cleanest read on how much hike risk the market is carrying.

Frequently Asked Questions

What did Andrew Hauser actually say about inflation?

Hauser said the inflation outlook looks worse than the RBA had forecast and is running a little above expectations. He stressed that inflation has been high for a very long time and that the central bank cannot allow inflation expectations to move away from target. He also said businesses report cost pressures as their number one problem, while acknowledging some slowing in labour market and housing data.

Will the RBA raise rates on 3 November?

Hauser did not pre-announce a decision. He said staff forecasts are still being finalised and that he does not know for certain what the Board will decide. The September hike to 4.60% was unanimous and was the fourth of 2026. The Q3 CPI on 28 October is the last major input before the Board meets on 2 and 3 November.

What does a hawkish RBA mean for the Australian dollar?

A further rate rise in play tends to support the Australian dollar, because a higher expected cash rate widens the carry advantage for holders of the currency. Short-dated Australian yields would also tend to push higher if markets add to hike pricing. Both effects depend on whether the Q3 CPI print on 28 October validates Hauser's warning on the inflation outlook.

Bottom Line

Hauser's warning on inflation expectations leaves 3 November live, with the 28 October CPI print now the deciding input.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.