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RBA's Hunter says rate rises have 'not quite yet' done the job, sees no systemic housing stress

Wire · Published 26 Oct 2026 (Australia/Perth) · Last updated 26 Oct 2026 (Australia/Perth)

Original graphic · Aus Property Invest

The Reserve Bank's chief economist says this year's four rate rises have "not quite yet" done enough to bring inflation under control, adding to signals from senior officials that the 3 November decision is live.

Assistant Governor (Economic) Sarah Hunter was asked on Nine's 60 Minutes, broadcast on Sunday 25 October, whether the bank had done enough. "Unfortunately, not quite yet," she said. "Obviously, the Board have put through four rate hikes this year to keep on tackling the challenge." The RBA says the interview was pre-recorded on 21 October, the same day Deputy Governor Andrew Hauser told a Citi conference the inflation outlook looked "materially worse" than the bank projected in August.

Hunter declined to pre-empt the Board. "I'm not going to front run what the Board might or might not do with interest rates," she said, adding that the Board is committed to getting inflation down and is also mindful of full employment. "We're not looking to drive the economy into a recession," she said, and the bank sees no signs of one yet in its data or business liaison.

The cash rate target is 4.60 per cent after the 29 September increase. Hunter's comments are not a decision. Only the Board statement on 3 November changes the rate.

Housing correction, but no systemic stress yet

Hunter described the housing market as one of the channels through which higher rates work, dampening both transactions and prices. "In some sense, what we see happening in the housing market is what we were looking to do," she said. She also pointed to "tax changes that we have in the May budget" flowing through, a reference to the Budget's negative gearing and capital gains tax changes for investors.

What the RBA is not seeing, she said, is that correction creating "financial stress systemically across the system". The bank is not seeing signs of large numbers of owners being forced to sell or falling behind on repayments, and most mortgage holders came into this period with buffers such as offset balances. She acknowledged some borrowers are struggling and said the bank would keep monitoring.

On prices, Hunter said the oil shock is "starting to get a bit more embedded into some of those supply chains" and named construction costs, noting builders are passing on higher materials costs for renovations. "We think that there's a bit more of that to come," she said. She said demand is still running above what the economy can sustainably supply, and declined to comment on whether government spending should change, saying that is a matter for elections and political debate.

The next hard data point is the ABS Consumer Price Index for September and the September quarter, due at 11.30 am AEDT on Wednesday 28 October. The same morning, from 11.15 am AEDT, Governor Michele Bullock and senior officials including Hunter are listed to appear before the Senate Economics Legislation Committee.

In their latest published notes, dated 15 to 22 October, bank economists were split on November. Westpac forecasts a 25 basis point rise to 4.85 per cent and ANZ sees a November hike as more likely than not, while Commonwealth Bank and NAB expect a hold but say another increase is a risk. These are bank forecasts, not RBA guidance.

None of this is buy, sell, hold or refinance advice.

How this was reported

Written by Wire for Aus Property Invest. All Hunter quotes are taken from the RBA's published transcript of the 60 Minutes interview. The cash rate and meeting calendar are from the RBA website and the CPI release time from the ABS release calendar. Bank forecasts are from the latest published notes of ANZ, Commonwealth Bank, NAB and Westpac, linked below. How we report: Wire.

General information only. Not financial, investment, legal or tax advice. See our Disclaimer.

Sources

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