"Attentive to the Data": Why One Phrase Now Matters More Than Any Promise

Sonal Goyal

04 November 2026 05:13 PM AEDT

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Key Highlights

The statement makes no promise about where the cash rate goes next.

The Board says it will be attentive to the data and the evolving outlook.

The coming releases on inflation, jobs and spending will matter more.

Data dependence means the next decision will depend on incoming information.

The Board will be attentive to the data. Central Bank statements often include a line like this, but in the Monetary Policy Board's 3 November 2026 statement it carries more weight than usual. The full sentence reads: "the Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions."

The sentence followed a 25 basis point rise in the cash rate target to 4.85 per cent, the fifth of the year. The vote was split, six to three. The statement offered no forward guidance about the size or direction of the next move. With no promise either way, the incoming data are the main guide to what happens next.

No promise, by design

The statement avoids commitments. It says "The Board will continue to do what it considers necessary to bring Inflation sustainably back to target." and "Monetary policy is well placed to respond to developments". It also notes "There continue to be heightened uncertainties about the outlook for domestic economic activity and inflation."

The RBA's forecasts in the November Statement on Monetary Policy (SMP) assume a cash rate path based on market pricing as at 28 October 2026. That path implies a rise of about 35 basis points by mid-2027 and then a stable 4.8 per cent in 2028. This is an assumption used for forecasting, not a plan the RBA has announced. The Board's decisions will depend on how the data unfold.

The data the Board has flagged

The statement and the SMP suggest which numbers are likely to matter most. Readers should treat this as a map of what the RBA has highlighted, not a prediction of what it will decide.

Underlying inflation. The statement says "the data have confirmed that underlying inflation remains broadly based." In the September quarter, trimmed-mean (underlying) inflation rose 1.0 per cent, up from 0.8 per cent in the June quarter, and was 3.7 per cent over the year. The RBA forecasts trimmed-mean inflation of 3.6 per cent over the year to December 2026.

Headline inflation. Headline CPI inflation was 3.9 per cent year-ended in the September quarter. The monthly measure was 4.3 per cent in the year to September 2026. The RBA forecasts headline inflation to peak at 4.5 per cent in the December quarter 2026. The next CPI release is on 25 November 2026.

Inflation expectations. This was the majority's main concern: "there is an increasing risk that higher inflation expectations will become embedded."

The labour market. Unemployment was 4.7 per cent in September 2026 and averaged 4.6 per cent in the September quarter, compared with the RBA's August forecast of 4.4 per cent. The participation rate was 66.9 per cent and the employment-to-population ratio 63.8 per cent in the September quarter.

Wages. The Wage Price index rose 3.2 per cent over the year to the June quarter. The RBA forecasts WPI growth of 3.4 per cent over the year to December 2026, revised higher. Liaison contacts report elevated wage expectations.

Spending and housing. Household consumption is a key drag on growth. Housing prices have fallen about 5 per cent from their March peak.

Energy. "The Middle East conflict remains unresolved," the statement notes. The RBA's Brent Crude assumption is US$109.5 a barrel for December 2026.

Why data dependence cuts both ways

Data dependence does not favour more rises or a pause. It means the Board will respond to what the numbers show, in either direction.

The SMP sets out the possibilities. Upside risks to inflation include prolonged energy disruption and strong AI-related investment. In one scenario, crude stays around US$100 a barrel and underlying inflation is around 2¾ per cent by end-2028 instead of about 2½ per cent. On the other side, inflation could fall faster if higher rates and falling housing prices weigh on spending. In a downside activity scenario, GDP ends up about 1.0 per cent lower by end-2028 and unemployment 0.3 percentage points higher.

The RBA judges domestic inflation risks to be skewed to the upside and domestic activity risks to be broadly balanced. It also admits it does not know exactly how tight policy is: financial conditions are restrictive, "though extent uncertain".

The split vote adds weight to each release

The vote also makes the data more important. Six members voted to raise the cash rate and three voted to leave it at 4.60 per cent. The statement does not explain the minority view. The Board was divided at this meeting, and with no promise about the next step, each new release could matter to how members weigh the case at the next meeting.

Before the next decision, several scheduled RBA events will add to the public record. The Chart Pack was due on 4 November. Deputy Governor Andrew Hauser is scheduled to deliver the Sir Leslie Melville Lecture at the ANU on 5 November. Assistant Governor (Economic) Sarah Hunter is scheduled to speak at the UBS Australasia Conference on 9 November. What they will say is not known in advance.

Some recent figures sit in the background. The RBA's Index of Commodity Prices fell 1.3 per cent in SDR terms in October (preliminary), after rising 0.9 per cent in September, but was 12.5 per cent higher over the year. The Financial Aggregates for September showed total Credit up 8.4 per cent over the year and housing credit up 7.0 per cent.

Governor Michele Bullock gave a reminder of the wider picture in Senate testimony on 28 October: "Recently, inflation has been around 3½ to 4 per cent in year-ended terms."

The bottom line

"Attentive to the data" means the Board has not set a course. It will make its decisions as the numbers arrive, starting with the CPI release on 25 November and leading up to the 8 December meeting. The forecasts assume market pricing of some further tightening, but that is an assumption, not a commitment. With a divided Board and no forward guidance, the incoming data carry more weight than any promise.

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