SYDNEY — A top Australian central banker said on Wednesday that tighter monetary policy was working to slow the economy but the inflation outlook had still worsened, leaving him unsure whether interest rates would need to rise further, Reuters reported. Speaking at a Citi conference in Sydney, Reserve Bank of Australia Deputy Governor Andrew Hauser said the bank's economists were still finalising their forecasts but the inflation outlook did look "materially worse", in part due to high oil prices.

Hauser said monetary policy could not deal with an oil shock directly, but it did need to make sure higher costs did not feed through to rising inflation expectations, Reuters reported. The central bank meets on November 3 to decide whether to raise its 4.60% cash rate for a fifth time this year. Markets now imply around a 40% chance rates will rise to 4.85% next month, up from 30% at the start of the week, with investors fully priced for a move by March. Consumer price data due next week could show headline inflation climbing to 4.0% in the third quarter as the Gulf war stokes fuel costs, while core inflation is seen holding around 3.5% — well above the RBA's 2% to 3% target band.

InvestingLive's summary of the same Citi appearance added that Hauser stressed inflation has been high for a very long time and the RBA cannot allow inflation expectations to drift away from target, that businesses are reporting cost pressures as their number one problem, and that he did not know for sure what the Board will decide on November 3. The RBA last raised the cash rate to 4.60% on September 29, its fourth increase of 2026. Since then, labour data have shown unemployment unexpectedly hit a five-year peak of 4.7% in September, while house prices have fallen faster than policymakers foresaw, Reuters reported.

The remarks moved currency markets: the Australian dollar hovered close to a three-week high against the US dollar, rising 0.1% to $0.7013, while the US dollar index was steady at 101.78 after slipping to a three-week low, Reuters reported from Tokyo. For the large Punjabi and Indian diaspora in Australia, the decision matters directly — another rise would lift mortgage and loan costs just as Gulf-war fuel prices are already pushing up everyday expenses.

Sources: Reuters, 'Australian central banker says policy working, but inflation outlook worse', Sydney, 21 October 2026; Reuters, 'Dollar on back foot as US yields, crude prices dip; Aussie buoyed by hawkish RBA', Tokyo, 21 October 2026; InvestingLive, 'RBA's Hauser says inflation outlook worse than forecast ahead of 3 November decision', 21 October 2026.