Goldman Sachs: The RBA
This morning Deputy Governor Hauser participated in a fireside chat at Citi’s Australia & New Zealand Investment Conference. On inflation, Mr Hauser noted “the inflation outlook looks materially worse than we projected in the August report." He cited three upside risks to inflation. First, “oil prices are even higher, about 1/3 higher than we assumed in the August projections.” Second, “we’re seeing higher... tech prices feeding through into CPI, not just here but elsewhere,” alongside “a boom in data centre construction here in Australia as well, so that’s upside too." And third, “components of CPI that are rising the most are actually the ones most directly linked to capacity pressures like market services,” and that, according to liaison, “cost pressures are the number one consideration for businesses." On 3Q2026 CPI, Mr Hauser noted consensus forecasts of around 1.0%qoq for trimmed mean is “definitely north of what we were assuming in August.” He said the market services data already published are “telling us that capacity pressures in the economy are probably pretty elevated and maybe a bit more elevated than we thought." This raises the question of “whether there’s less capac
This morning Deputy Governor Hauser participated in a fireside chat at Citi’s Australia & New Zealand Investment Conference. On inflation, Mr Hauser noted “the inflation outlook looks materially worse than we projected in the August report." He cited three upside risks to inflation. First, “oil prices are even higher, about 1/3 higher than we assumed in the August projections.” Second, “we’re seeing higher...
tech prices feeding through into CPI, not just here but elsewhere,” alongside “a boom in data centre construction here in Australia as well, so that’s upside too." And third, “components of CPI that are rising the most are actually the ones most directly linked to capacity pressures like market services,” and that, according to liaison, “cost pressures are the number one consideration for businesses." On 3Q2026 CPI, Mr Hauser noted consensus forecasts of around 1.0%qoq for trimmed mean is “definitely north of what we were assuming in August.” He said the market services data already published are “telling us that capacity pressures in the economy are probably pretty elevated and maybe a bit more elevated than we thought." This raises the question of “whether there’s less capacity in the economy than we previously thought.” On inflation expectations, Mr Hauser said that “we are beginning to see some signs that some people in the community are not sure if we’re going to bring inflation back into target at all.” He cited measures from the Business Outlook Scenarios Survey (BOSS) survey, which “shows that there is an increasing share of businesses who are thinking that maybe...
three percent, 3'A is the new normal.” On recent economic activity, Mr Hauser noted that the picture was “more mixed", with weakness in the housing and labour market offset by “pockets of growth" in overseas demand growth and data centre investment. He reiterated that there needs to be “a period of below trend growth to bring inflation down." On the rise in the unemployment rate, Mr Hauser stressed that the increase was only “a little weaker than... expected" and noted that the unemployment rate remains low globally and relative to history.
He also flagged that the RBA ”need[s] to see some easing" and were currently debating “whether [the unemployment rate] goes to 5 [or] whether it goes to some other number.”