Key Highlights

  • In a 60 Minutes interview broadcast on 25 October 2026, Assistant Governor Sarah Hunter said higher interest rates will bring Inflation down but are "really tough".
  • She said the Board has made four rate rises this year and that Demand is "a bit above what we can sustain".
  • Hunter said the RBA is "not trying to achieve a sharp stop" and would not front-run Board decisions; the next meeting is on 2 and 3 November 2026.

Rare public interviews from the Reserve Bank of Australia tend to reveal how officials explain painful decisions. In a 60 Minutes interview broadcast on 25 October 2026, Assistant Governor (Economic) Sarah Hunter said higher interest rates do work, while accepting they are tough on households. Here is what she said and what it does and does not mean.

What was said and when

The interview, with Adam Hegarty, was recorded on 21 October 2026 and broadcast on 25 October. Hunter said the Board has made four rate rises this year. She said: "We know that higher interest rates will bring inflation down, but it's just really tough."

These are Hunter's personal remarks as an RBA official. They are not a new Board decision, and she said she would not front-run the Board's decisions.

Why the RBA says rates are needed

Hunter blamed an oil shock from the Middle East for rising petrol, diesel and construction costs, which she said are starting to show up in the data. She said demand is "a bit above what we can sustain", so the RBA must stop inflation becoming embedded.

The Board's September minutes, published on 13 October, are consistent with that view. They say excess demand is greater than previously assessed, and that petrol and diesel prices were 13 per cent above the August forecasts. The Board lifted the cash rate target to 4.60 per cent on 29 September.

Uneven effects

Hunter acknowledged that rate rises fall unevenly. She said they affect people well beyond Mortgage holders, and that renters on lower incomes bear the cost of high inflation too. She said the RBA is not yet seeing systemic financial stress from the housing slowdown, which she described as an intended channel of rate rises, partly reinforced by tax changes in the May budget.

Why not other tools?

Asked about alternatives, Hunter said price controls in the 1970s, a wage freeze in the early 1980s, and Credit or money Supply targeting had been tried and were not effective. She said: "It's not painless, unfortunately." She added that inflation has come down over the last few years without a large rise in unemployment, which she described as a sign that rates are working.

Recession risk and timing

Hunter said the RBA is "not trying to achieve a sharp stop" and is watching closely for signs of recession, though Business liaison has not shown one yet. She said another economist's view that one more hike could tip the economy over was "his particular view", not the RBA's baseline.

Asked when the pain will end, she said more price pressure is still coming through and "we've got a little bit longer to go before it starts to get better". She added that "months could be longer or shorter".

What it means for households

The cash rate is not your mortgage rate. Lenders set their own mortgage and deposit rates, so a Board decision does not change them automatically or by the same amount. Hunter did not forecast any rate decision and cited no specific mortgage figures.

Uncertainties

Hunter said the effect of rate rises takes time and that government spending is part of demand. She said the RBA factors budgets into its forecasts and that Fiscal Policy is a matter for elected governments. She also noted that the RBA is independent and unelected.

What to watch next

The Monetary Policy Board meets on 2 and 3 November 2026. Watch the Board's statement and updated forecasts, and the September-quarter inflation data that precede it.