RBA Rate Hike Odds Surge as Hauser Warns Deteriorating Inflation Outlook

Market expectations for a fifth Reserve Bank of Australia rate hike this year jumped after Deputy Governor Andrew Hauser warned Australia's inflation outlook has deteriorated materially since August. Market-implied odds for a 25-basis-point increase to 4.85% at the November 3 meeting rose from roughly 30% to between 41% and 45%. Hauser warned third-quarter trimmed mean inflation is tracking higher than projected, driven by oil prices running one-third above forecasts, AI investments, and strong Asian trading partner demand. The hawkish comments come despite September unemployment reaching a five-year high of 4.7%, shifting focus to third-quarter CPI data due October 28.