FEAR & GREED | Business News Q+A: The Week Ahead | 3 Nov 2025
Nov 2, 2025
Diana Mousina, the Deputy Chief Economist at AMP, joins to dive into the latest economic trends. She analyzes how shock inflation numbers have shifted expectations for the RBA's interest rate decisions. Surprising CPI figures caught economists off guard, and Diana discusses the implications for future rate cuts. Housing prices are also a focal point as they impact RBA policies. Lastly, she emphasizes the importance of household spending as a key indicator that the RBA will be monitoring closely.
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Inflation Shock Changed RBA Expectations
- The RBA meeting outcome changed after surprise high September-quarter inflation reversed expectations of an imminent cut.
- Similar inflation levels across advanced central banks contrast with different easing paths, highlighting global commonality.
Cumulative Small Surprises Drove Inflation
- The inflation surprise came from a small cumulative upside across many categories rather than one big shock.
- Administered and indexed prices, especially services, drove most of the surprise and are less responsive to market forces.
Services Inflation Is The Sticky Issue
- Services inflation remains the core problem and should ease as labour-market slack grows and wage growth slows.
- A pipeline tracker still points to lower inflation ahead, suggesting the quarter may be a temporary blip.