RBA Assistant Governor Hunter has defended the central bank's interest rate rises in a rare television interview. Asked whether the tightening had been enough to tame inflation, she replied "not quite yet." The RBA lifted its cash rate in late September to 4.6%, the highest level in 15 years.
Hunter, who oversees economic forecasting at the RBA, said interest rates were what had worked. "What we found did work and we found it here and in many other countries is interest rates," she said. The interview was pre-recorded on 21 October 2026.
RATES, SPENDING AND THE WAGE FREEZE
Hunter acknowledged the role of government spending. "Yeah, look, government spending is definitely part of the picture," she said.
Australia tried a wage freeze in the early 1980s.
WAR-DRIVEN OIL COSTS REACH DOMESTIC PRICES
Hunter pointed to the ongoing US-Iran war as a source of renewed pressure. Investinglive reported that war-driven oil costs are working their way into supply chains and that a fifth increase looks likely on 3 November.
Citing the cost of home renovations, she said: "If you've got a builder in, he's saying, I'm going to have to put my prices up a bit because my material costs have gone up."
Deputy Governor Andrew Hauser has said the inflation outlook is materially worse than the bank assessed in August.
HOUSEHOLDS AND BUILDERS FEEL THE STRAIN
About 3.3 million Australians hold a mortgage, and the rate rises weigh on them directly. The RBA's strategy relies on Australians cutting back, and the latest figures show household spending has already stalled.
Housing supply faces its own constraints. Metricon, described as the nation's biggest builder, says red tape is getting in the way of the government's target of 1.2 million new homes, leaving it out of reach.
Related: Reserve Bank of Australia keeps heightened scrutiny on ASX clearing systems