RBA’s Hunter says inflation pressure still needs time to ease
Reserve Bank of Australia official Sarah Hunter said the bank had raised rates four times this year, but the effect on inflation takes time. In a television interview aired on Sunday, she described oil costs spreading beyond fuel and domestic demand remaining above sustainable supply. Hunter did not announce a decision for the November meeting; the remarks clarify the pressures policymakers are weighing.
Economics & Markets··Morning
Hunter describes unfinished inflation work
Reserve Bank of Australia Assistant Governor Sarah Hunter discussed persistent inflation in a 60 Minutes television interview aired on Sunday. The bank published the interview, and the NAB Morning Call episode released that evening separately noted her hawkish remarks on the programme. Hunter said the board had raised rates four times this year and that those increases need time to work through the economy.[1], [2]
The interview was recorded on October 21 before its October 25 publication. Hunter described an oil-price shock originating outside Australia. The higher cost first reaches petrol and diesel and is starting to show up in other prices, including construction inputs. She said the bank is watching whether those external pressures persist and spread through supply chains rather than fade after the first rise in fuel.[1]
Oil costs reach beyond the pump
Hunter also pointed to domestic demand that remained somewhat above what the economy could sustainably supply with low, stable inflation. Higher interest rates are intended to narrow that imbalance, although their effects arrive at different speeds. She described the bank’s task as preventing an overseas cost shock from becoming entrenched while bringing spending and productive capacity into better balance.[1]
Mortgage borrowers can feel a rate increase within a week or two when lenders pass it through, Hunter said. Higher rates also influence saving, household spending and company decisions about projects funded with loans. She acknowledged that the burden is uneven: some households are struggling, while many mortgage holders entered this period with savings or other buffers.[1]
The board has made no next-rate decision
The bank was not seeing widespread mortgage repayment distress or forced home sales across the system, according to Hunter. Slower housing transactions and prices formed part of the policy transmission she described. Those observations do not erase the hardship of households under pressure; they distinguish individual difficulties from a financial-system problem that the bank says it has not observed.[1]
Hunter declined to predict the board’s next rate decision. She said the Reserve Bank also has a full-employment mandate and is not seeking a recession; its data and business contacts had not yet shown one. Government spending enters the bank’s forecasts, but elected officials make budget choices. The board will weigh those conditions rather than treat her interview as an announced November decision.[1]
