{"id":439059,"date":"2026-09-30T06:17:50","date_gmt":"2026-09-29T23:17:50","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/westpac-sees-rba-hiking-again-in-november-after-25bp-move-to-4-6-yesterday-439059\/"},"modified":"2026-09-30T06:17:50","modified_gmt":"2026-09-29T23:17:50","slug":"westpac-sees-rba-hiking-again-in-november-after-25bp-move-to-4-6-yesterday","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/westpac-sees-rba-hiking-again-in-november-after-25bp-move-to-4-6-yesterday-439059\/","title":{"rendered":"Westpac sees RBA hiking again in November after 25bp move to 4.6% yesterday"},"content":{"rendered":"<div>\n<p dir=\"ltr\">Westpac&#8217;s base case that the RBA hikes again in November leaves the Australian outlook heavily tied to energy prices and the Middle East conflict, since only a lasting resolution or a sharp fall in energy-related costs is seen as likely to change it. The bank sees a much higher bar for hikes beyond November, which suggests the market debate may shift from whether the RBA tightens again to when it stops. Softer labour market and housing signals are the main counterweights to the hawkish tone. Australian inflation data due later today will test how much of the energy shock is filtering through to prices.<\/p>\n<p dir=\"ltr\">&#8212;<\/p>\n<p dir=\"ltr\"><a href=\"https:\/\/investinglive.com\/news\/investinglive-european-news-wrap-us-iran-talks-keep-markets-tentatively-optimistic\/\" rel=\"follow\">The RBA&#8217;s unanimous hike to 4.6%<\/a> was driven by energy prices and firmer data, and Westpac now sees a November follow-up as the base case, with a far higher bar after that.<\/p>\n<p dir=\"ltr\">Summary:<\/p>\n<ul dir=\"ltr\">\n<li>The RBA&#8217;s Monetary Policy Board lifted the cash rate by 25bp to 4.6% on Tuesday, September 29, in a unanimous decision that was widely expected.<\/li>\n<li>The move is a sharp turnaround from the August meeting, where Westpac said an extended hold looked to be the base case, and reflects upside inflation risks the RBA had flagged then.<\/li>\n<li>The RBA statement said global energy prices are now well above what it assumed in its August forecasts, and its liaison indicates firms are passing costs on, though only partially.<\/li>\n<li>The statement dropped language describing the labour market as a little tight and said it was easing broadly as expected, even though unemployment is already above the RBA&#8217;s August forecast of 4.5% for the December quarter.<\/li>\n<li>The RBA said it would raise the cash rate further if needed, dropping the earlier condition that upside risks must materialise.<\/li>\n<li>Westpac says a November hike is now the base case absent a lasting resolution of the Middle East conflict or another event that cuts energy-related costs, with a higher bar for hikes beyond that.<\/li>\n<\/ul>\n<p dir=\"ltr\">\nThe Reserve Bank of Australia raised its cash rate by 25 basis points to 4.6% on Tuesday, September 29, in a unanimous decision by its Monetary Policy Board (MPB), and Westpac now expects a follow-up increase in November. The move was widely expected, but Westpac chief economist Luci Ellis said it marks a sharp turnaround from the board&#8217;s 11 August meeting, when an extended period on hold looked to be the base case. At that meeting the data had run against the RBA&#8217;s more hawkish view and its published forecasts did not support further hikes.<\/p>\n<p dir=\"ltr\">Ellis said the board can now point to some of the upside inflation risks it warned about in August. The post-meeting statement put unusual emphasis on the Middle East conflict, saying global energy prices are now well above what the RBA assumed in its August forecasts. The RBA&#8217;s liaison program indicates firms are passing on higher costs or plan to, although the pass-through was described as partial and additional to inflation driven by domestic capacity pressures. Westpac reads that as a sign the RBA is worried about upside risks to underlying inflation in the fourth quarter as well as the third. The bank also noted that the RBA is watching construction costs and retail prices of IT goods linked to the AI and data centre boom, though Governor Michele Bullock said in the media conference that those risks are building rather than materialising.<\/p>\n<p dir=\"ltr\">The statement also omitted language calling the labour market a little tight, despite that being the message from the Governor and other staff between meetings, and instead described the market as easing broadly as expected. Westpac noted that unemployment has already risen above the RBA&#8217;s August forecast of 4.5% for the December quarter, and that views on spare capacity clearly differ, pointing to Treasury forecasts that imply more slack. The unanimous vote suggests any doubts among external board members about the RBA&#8217;s downbeat view of supply capacity were outweighed by resurgent oil prices and stronger than expected inflation and growth data.<\/p>\n<p dir=\"ltr\">The board&#8217;s wording also shifted. It said it will do what it considers necessary to bring inflation sustainably back to target, including raising the cash rate further if needed, a change from the earlier condition that upside risks must materialise, and a return to the tone of the June meeting.<\/p>\n<p dir=\"ltr\">For what comes next, Westpac says the bar for a November hike is low and, judging by the rhetoric, it is now the base case, unless a lasting resolution of the Middle East conflict or another event significantly lowers the outlook for energy-related costs. It sees a much higher bar for hikes beyond November, given the cumulative rise in rates, the easing labour market and an expected further weakening in housing.<\/p>\n<p dir=\"ltr\">&#8212;<\/p>\n<p dir=\"ltr\">RBA dates 2026.\u00a0<\/p>\n<p dir=\"ltr\">\n<p>                            This article was written by Eamonn Sheridan at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Westpac&#8217;s base case that the RBA hikes again in November leaves the Australian outlook heavily tied to energy prices and the Middle East conflict, since only a lasting resolution or a sharp&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-439059","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=439059"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439059\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=439059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=439059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=439059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}