Summary:
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RBA says November CPI largely as expected, “not a lot of news”
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Inflation above target, with core still sticky at 3.2%
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Deputy governor reiterates rate cuts unlikely anytime soon
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Black Friday sales helped headline CPI, housing costs firm
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February meeting remains live, with hike risk still priced
Reserve Bank of Australia Deputy Governor Andrew Hauser has pushed back against market optimism around easing inflation, making clear that interest rate cuts are unlikely anytime soon and reinforcing the central bank’s bias toward keeping policy restrictive, or potentially tightening further, if inflation proves persistent.
Speaking in an interview with ABC News, Hauser said recent inflation data had been “helpful” but contained “not a lot of news” for policymakers. Headline CPI slowed to 3.4% y/y in November, while the RBA’s preferred trimmed mean measure eased to 3.2%, still above the central bank’s 2–3% target band.
Hauser was blunt in his assessment, stressing that inflation above 3% remains too high and that the board’s focus is firmly on preventing a repeat of the prolonged inflation surge seen in recent years. He echoed comments made in December by Governor Michele Bullock, who indicated the board had only debated holding rates steady or raising them, effectively ruling out cuts for the foreseeable future.
While markets initially welcomed the softer November CPI print, Hauser downplayed its significance, noting that much of the easing reflected temporary factors such as Black Friday discounting. At the same time, he flagged renewed pressure in housing-related costs, underscoring the uneven and potentially sticky nature of inflation dynamics.
Crucially, Hauser emphasised that the RBA does not target current inflation readings, but rather the outlook one to two years ahead. That assessment incorporates a broad range of variables including demand conditions, labour market tightness, global developments and inflation expectations, rather than any single data point.
Attention now turns to the December-quarter CPI release due later this month, which the RBA still views as more reliable than the newer monthly series. Hauser suggested only an exceptionally large surprise would materially alter the board’s thinking ahead of its February meeting.
Markets continue to price roughly a one-third chance of a February rate hike, with Hauser declining to endorse or reject those odds. The messaging, however, leaves little doubt that policy easing is off the table for now, and that inflation progress will need to be both sustained and broad-based before the RBA shifts stance
