"Not Seeing Really Bad Outcomes Yet": Sarah Hunter's Reading of Household Strain

Aditi Sarkar

29 October 2026 09:03 PM AEDT

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Highlights

Hunter said the RBA is "not seeing really bad outcomes yet" based on data tracking household financial conditions.
She said there are no signs of recession in any of the data the RBA tracks and the Board does not want to generate one.
Mortgage payments are near 10% of household disposable income, close to their 2024 peak, based on September Board minutes.
Hunter pointed to historical price controls and wage freezes as alternatives to rate rises that proved more damaging.

Sarah Hunter, the Reserve Bank of Australia's Assistant Governor (Economic), gave her most direct public assessment of household financial health in a 60 Minutes interview published 25 October 2026 after being pre-recorded on 21 October. Her account balances real pain against the absence, so far, of widespread distress.

What Hunter Said, and the Word Doing the Work

Hunter described the effect of higher interest rates to interviewer Adam Hegarty: "It's not pain-free, it's not costless." She then contextualised the Board's choice: "but the cost of it is less using interest rates than it would be using other tools." Her assessment of household outcomes was measured: "But we're not seeing really bad outcomes yet."

The word "yet" in her statement is significant. It describes the current state of the data, not a guarantee about the future. Hunter was characterising what the RBA's monitoring shows at the time of the interview, four rate rises into 2026, not offering a commitment about what comes next.

The Data Behind "Not Yet"

The Board's minutes from its 29 September meeting set out the household data staff presented. Scheduled mortgage payments were about 10% of household disposable income, near the 2024 peak. Fewer than 2% of owner-occupier borrowers were facing a cash flow shortfall.

Savings buffers provide some resilience. Borrowers in the lowest income quintile held savings equal to just under one year of scheduled repayments. Those in the highest quintile held almost two years. Hunter did not cite these figures directly in the interview, but they form the data backdrop to her assessment.

Why Rates Over Other Tools

Hunter pointed to history to explain the Board's tool choice. Some countries used price controls in the 1970s to combat inflation. Australia tried a wage freeze in the early 1980s. Hunter did not elaborate on specific outcomes but her framing placed interest rates as the least damaging available instrument.

On recession, Hunter was unequivocal: "We don't see any signs of that yet in any of the data that we track." She added: "We don't want to generate a recession." The Board's September decision, unanimous across all nine members, reflected a judgment that the employment risks were not sufficient to outweigh the inflation risks at that meeting.

FAQs

Q: When was Sarah Hunter's 60 Minutes interview broadcast?

A: It was published on 25 October 2026 after being pre-recorded on 21 October 2026.

Q: What did Hunter say about the risk of recession in Australia?

A: She said the RBA does not see any signs of recession in any data it tracks and stated the Board does not want to generate one.

Q: What does Hunter say about the cost of using interest rates to fight inflation?

A: She said the cost of using interest rates is less than using other tools, citing historical examples of price controls and wage freezes as less effective alternatives.

Q: What share of borrowers face a cash flow shortfall under RBA data?

A: Fewer than 2% of owner-occupier borrowers were estimated to face a cash flow shortfall at the time of the September Board meeting.

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