Andrew Hauser, the Reserve Bank’s deputy governor, has reignited discussions about a potential fifth interest rate hike on Melbourne Cup day. He cautioned that the inflation outlook is becoming increasingly dire, presenting the RBA with "hard choices" as it seeks to balance the risks of entrenched inflation against the need to protect the labor market.

Key Remarks from Hauser

Speaking at an investment bank conference in Sydney on Wednesday morning, Hauser indicated that the RBA monetary policy board is grappling with a slowing economy while also addressing concerns that Australians may be losing faith in the central bank's ability to return inflation to the 2.5% target.

  • The next RBA monetary policy board meeting is scheduled for November 2.
  • Financial markets had been pricing in a nearly one-in-three chance of a rate hike to 4.85%, but those odds may decrease following Hauser’s comments.
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"The basic fact [is] that inflation has been high for a very long time now, and 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, or certainly not for an extended period," Hauser stated.