FEAR & GREED | Business News Q+A: The Week Ahead | 10 Nov 2025
Nov 9, 2025
Diana Mousina, Deputy Chief Economist at AMP, shares her insights on the economy. She discusses the RBA's outlook on inflation and the potential for a rate cut next year. Mousina elaborates on the impact of government spending and public-sector wages on inflation rates. She also predicts a slight drop in the unemployment rate and highlights the importance of consumer sentiment amid ongoing cost-of-living pressures. Additionally, she examines the implications of the US government shutdown on economic data.
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RBA Sees Persistent Inflation Upswing
- The RBA expects the September-quarter inflation uptick to persist for months, pushing trimmed-mean inflation above target for longer.
- AMP disagrees, citing forward indicators that point to softer inflation over the next 12 months.
Forward Indicators Point To Slower Inflation
- AMP uses forward-looking indicators (food, commodity prices, PMIs, business surveys) to forecast a slowing of inflation.
- If AMP is right, unemployment will rise and a rate cut will likely be needed next year; otherwise cuts may not occur.
High Public Spending Can Add To Inflation
- Government spending contributes to inflation when it increases demand and draws resources away from other sectors.
- Diana Mousina argues high public-sector wages and non-market jobs have driven services inflation and lifted the trimmed mean.