RBA's Kent Questions Policy Restrictiveness Amid Rising Neutral Rates

Key Facts

1RBA Assistant Governor Christopher Kent stated there is reasonable evidence that neutral interest rates are rising both in Australia and globally.

2Kent questioned whether the current 4.60% cash rate is restrictive enough if neutral rates have indeed shifted higher.

3Markets are eyeing the Q3 CPI data due on October 28 as a pivotal factor for the RBA's November policy meeting.

RBA Assistant Governor Christopher Kent stated there is reasonable evidence that neutral interest rates are rising both in Australia and globally. According to investinglive.com, Kent questioned whether the current 4.60% cash rate is restrictive enough if neutral rates have indeed shifted higher, raising concerns about the current policy's effectiveness in cooling the economy.

These remarks follow official data showing employment fell by 39.3k in September 2026, which pushed the unemployment rate to 4.7% on October 15, 2026. Kent noted that while household demand is softening, business credit growth remains strong, leaving markets focused on the Q3 CPI data due on October 28, 2026, as a pivotal factor for the November policy decision.

RBA member Andrew Hauser is scheduled to deliver a speech on October 20, 2026, which may provide further insights into the central bank's stance ahead of its upcoming meeting.