Hauser Says the Inflation Outlook Looks “Materially Worse” and the September CPI Lands 28 October. Five Days Later the Board Decides Whether Your Assessment Rates Move Again

What the Deputy Governor actually said

Andrew Hauser, Deputy Governor of the Reserve Bank of Australia, spoke in a fireside chat at Citi’s Australia & New Zealand Investment Conference in Sydney on 21 October 2026. The RBA has published the transcript, and the language in it is unusually direct for a pre-meeting appearance.

On the forecast: “The inflation outlook looks materially worse than we projected in the August report.” On the quarterly print due this month: “the quarterly number is going to be bigger than we assumed in the August report.”

On expectations, which is the part that should hold a broker’s attention, Hauser pointed to survey evidence that more businesses now treat three to three and a half per cent as the new normal, and said: “that is the central banker’s nightmare. We can’t allow expectations to shift away from the target.”

He was equally plain about the cost of acting. He framed the board’s choice as whether “you do more to tackle higher inflation, recognising that that means weaker activity, weaker labour market”. On the data already in: “The labour data last week, a little bit weaker than people had expected,” and “Labour market is easing. Consumption growth is quite tepid.”

The ABS Labour Force release on 15 October put employment down 39,300 in September and the unemployment rate up 0.1 percentage points to 4.7%. Hauser acknowledged it and did not treat it as decisive.

Two dates, and the five days between them

The September-quarter Consumer Price Index is scheduled by the Australian Bureau of Statistics for 28 October 2026 at 11:30am AEDT. The Monetary Policy Board meets on 2–3 November, with the outcome announced at 2:30pm on 3 November alongside the quarterly Statement on Monetary Policy.

A 25-basis-point increase would be the fifth of 2026 — after rises effective in February, March, May and September — and would take the cash rate to 4.85%. The Adviser reported on 22 October that market pricing for a November increase had moved to 57%, from below 20% the week before, and that a move to 4.85% would be the highest cash rate since 2008. Those are single-outlet figures and worth treating as indicative rather than settled.

What matters operationally is that the CPI print and the decision are five days apart. Brokers who wait for 3 November to start the conversation will be having it in a week when every client has already read the headline. Brokers who do the work before 28 October are having it on their own timetable.

The channel the RBA plays down is the one you work in

Two days before Hauser spoke, Christopher Kent, the RBA’s Assistant Governor (Financial Markets), appeared at the Commonwealth Bank’s Global Markets Conference. Running through how monetary policy actually transmits through the economy, Kent said: “the one that gets way too much attention, and we’ve said this before, is the cash flow channel.” He added that “the cash flow is probably the least important in terms of the macroeconomics.”

He is making a technical point, and in its own terms a defensible one. Kent’s argument is that the exchange rate, the wealth channel working through housing and dwelling investment, and the intertemporal channel — the incentive to save rather than spend — do more of the macroeconomic work than the raw change in mortgage repayments. He noted that Australian households use offset accounts to “pay their mortgages down a bit faster”, which he described as “a way of providing a bit of self-insurance”. He is not saying higher repayments are painless. He is saying they are not the main lever in the model.

Where 25 basis points actually shows up on a file

The repayment change is the visible part. The part that reshapes your pipeline is the assessment rate.

APRA’s expectation, confirmed in its 2026 submission to the Senate Select Committee on Productivity, is that authorised deposit-taking institutions assess all new borrowers’ ability to meet housing loan repayments “at an interest rate that is at least 3.0 percentage points above the loan product rate”. The buffer is a margin above the product rate, not above the cash rate. So where a lender passes a cash rate increase through to its variable product rate, the assessment rate moves with it, one for one.

That has three practical consequences, and none of them are theoretical:

• Pre-approvals with thin headroom become re-work. A file approved at the top of its capacity on today’s product rate is a different file when the product rate moves and the approval is re-tested on extension or at formal application.
• Submitted-but-unsettled files can shift. Lender practice on re-assessment varies. Whether a file in progress is re-tested, and at what point, is a lender-by-lender and policy-by-policy question — not something to assume in either direction.
• Your calculator output has a use-by date. Capacity figures quoted to a client in October are quoted on an October product rate. If you put a number in writing, note the rate it was calculated on.

Resist the urge to publish a tidy rule of thumb about how much capacity a 25-basis-point move removes. It depends on the lender’s floor and buffer settings, the assessment treatment of existing commitments, income type, and the household’s expense benchmark. Run it in your aggregator’s servicing tools on your own live files rather than quoting an industry average to a client.

Who the next increase would land on

The RBA’s October Financial Stability Review holds that “most Australian households with mortgages remain well placed to manage more difficult conditions”, pointing to positive equity and accumulated savings buffers. That is the aggregate view, and brokers do not work in aggregate.

The Adviser reported on 23 October on Experian’s Housing Pressure Report for the first half of 2026. On that reporting, the number of home loan accounts showing strain — measured through arrears, hardship arrangements and loan variations — rose 7.3% over six months, against 2.3% in the corresponding period of 2025, with 1.8% of accounts showing strain by June. Borrowers aged 35–44 recorded the fastest increase, up 11.8% year to date. Regional accounts were around 10.5% more likely than the national average to show strain. Experian’s June-quarter bureau data put new borrowers’ predicted default risk 35% above that of the average home loan borrower. In Experian’s survey, 42.4% said they were not confident they could withstand a further 10% repayment rise without cutting essential spending or taking on more debt.

These figures come from one outlet’s reporting of a report we have not read in full, so treat them as a direction of travel rather than a measurement. But the direction is clear enough to segment a book on: the clients most exposed are mid-career borrowers, regional borrowers, and anyone who settled in the past twelve months.

Those three groups are findable in your CRM this afternoon.

The forecasters disagree — and that is your problem too

The Adviser‘s 22 October report put ANZ and Westpac forecasting a November increase, with NAB and CBA tentatively expecting the hiking cycle to have finished and an extended hold to follow. Two of the four majors on each side.

That split matters for how you document a recommendation. A broker cannot lean on “the bank’s view” when the banks hold two views, and a fixed-versus-variable recommendation made this fortnight is being made into genuine disagreement among the people paid to forecast it.

Nothing here is legal or compliance advice, and obligations under the National Consumer Credit Protection Act 2009 and ASIC’s guidance are matters for your licensee. But as a general proposition, the recorded reasons on a file carry more weight when they show what was known at the time and why the recommendation followed from it. A note that says the client preferred certainty of repayment over a possible saving, that the forecasting view was divided at the date of advice, and that both options were put, is a more durable record than one that says the broker expected rates to rise. Your aggregator’s compliance team is the right place to test how that should read in your own process.

Your ten-day pipeline review

Work to do before the CPI prints on 28 October, not after the decision on 3 November:

1. List every pre-approval and conditional approval expiring before the end of January. Sort by headroom, not by date. The thin ones are the re-work.
2. Re-run the thinnest files at a higher assessment rate in your servicing tools, so you already know which clients need a revised figure rather than discovering it at formal application.
3. Check which lenders on your panel re-assess in-flight files and at what trigger. Confirm it with your BDMs rather than assuming last cycle’s answer still holds.
4. Date-stamp every capacity figure you have given a client in writing this month, and note the product rate it was based on.
5. Pull the three exposed segments — borrowers aged roughly 35–54, regional security addresses, and settlements in the past twelve months — and decide which get a proactive call.
6. Draft the client message once, now, in two versions: one for a hold, one for an increase. On 3 November you will want to send, not write.
7. Refresh your hardship referral path. Know which lenders’ hardship teams move fastest and what each needs on day one, before a client needs it.
8. Review your fixed-rate file notes from the past six weeks against your licensee’s expectations for recorded reasons.

Common questions

What to watch next

The September-quarter CPI on 28 October is the number. After that, the Statement on Monetary Policy released with the decision on 3 November will carry the RBA’s revised forecasts — and given Hauser has already said the August set looks materially worse, the revision is the document to read, not the headline. Watch, too, how quickly lenders move their fixed rate books in the days before the decision: fixed pricing tends to move ahead of the cash rate, and divergence between a lender’s fixed book and its published forecast is a useful signal about what its treasury desk actually expects.

Meanwhile, the broker job is unglamorous and entirely within your control. The board will decide what it decides on 3 November. Whether your pipeline is ready for either answer is decided this week.