RBA Recap

• A surprise lift in September-quarter inflation has disrupted the RBA’s smooth disinflation narrative, forcing policymakers to rethink how quickly they can ease.
• Despite a softening labour market, underlying capacity pressures and sticky price dynamics have lifted the hurdle for further rate cuts.
• With global and domestic risks finely balanced, the RBA’s November decision signals a cautious pause. Stability, for now, is the new strategy.

The Australian Economy

• A broad-based rise in prices, from housing and utilities to services like health and insurance has reignited inflation concerns, challenging confidence in a smooth path back to target.
• Unemployment has edged up to 4.5%, and full-time hiring has slowed, yet participation remains near record highs, underscoring an economy that’s easing but far from weak.
• With households tightening spending, housing activity firming, and price pressures lingering, the RBA is treading carefully, choosing stability as Australia’s economy tests the limits of its resilience.

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