The Reserve Bank of Australia’s MPC raised the cash rate target 25bps to 4.60%.
The RBA said inflation remains elevated and several upside risks flagged in
August are emerging. An expanded Middle East conflict has pushed global energy
prices materially above the assumptions used in August. Rising AI-related demand
is accelerating prices for technology goods. Domestic capacity constraints
persist; bank contacts report firms facing higher costs and raising or planning
further price increases, and short-term inflation expectations remain elevated.
Recent Australian inflation data were stronger than at the previous meeting.
Output growth has slowed, though Q2 GDP was marginally stronger than expected;
consumer spending is cooling, while most capital-city house prices and new
housing lending have declined noticeably.
