FEAR & GREED | Business News Q+A: Why this economist thinks a rate hike is on the cards
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Nov 4, 2025 Warren Hogan, Managing Director of EQ Economics and Economic Advisor at Judo Bank, shares insights on shifting demographics and their impact on economic models. He believes inflation risks are rising, suggesting that interest rates might actually need to increase. Hogan discusses the potentially neutral cash rate being higher than expected and the challenges of managing inflation without robust growth. He also emphasizes the importance of moderating fiscal policy and reskilling to prevent past economic pitfalls.
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Demographics Are Reshaping Inflation Dynamics
- Demographic shifts have flipped labour markets from excess supply to shortages, altering supply-demand dynamics.
- Warren Hogan warns this structural change reduces confidence in traditional economic models and raises inflation risk.
Bigger Government Can Be Inflationary
- A larger government share of the economy reduces resources for the private sector and can be inflationary.
- Hogan views rising recurrent government spending plus structural shifts as a risky cocktail pushing inflation higher.
Neutral Rate May Be Higher Than Believed
- The neutral cash rate is likely higher than many models estimate, so current policy may already be easing.
- That combination with rising inflation implies interest rates will probably need to go up.