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Speaking to the Australian Broadcasting Corporation(ABC) last week, Hauser said that despite headline inflation coming down from its post-pandemic peak, it remains above the Reserve Bank of Australia’s (RBA) 2–3 per cent target.
He flagged that this had led to the monetary policy board deciding to keep the cash rate steady in December - and would likely stay its hand in February, too.
The deputy governor suggested that borrowers should not expect imminent relief at the next interest rate announcement (on 3 February), despite the release of more promising inflation figures for November.
“The likelihood, at least in the near term, of further rate cuts was probably very low,” Hauser said.
“That’s still true, if I’m honest with you.
“I know that won’t be the message that everyone would want to hear, but our objective, our priority is to ensure that inflation remains on target.”
The comments come despite a modest easing in the latest monthly inflation data.
The consumer price index (CPI) rose 3.4 per cent in the 12 months to November 2025, down from a 3.8 per cent rise in the 12 months to October 2025. Similarly, trimmed mean annual inflation was 3.2 per cent in the 12 months leading up to November, down from 3.3 per cent in the 12 months to October.
Hauser said the result was largely in line with the RBA’s expectations and did not materially change its assessment of inflationary pressures.
“Inflation above 3 per cent, let’s be clear, is too high,” Hauser said.
“I think we all remember the pain and the difficulty, many of us are still working that through, of that persistent high period of inflation over the last few years.
“It’s our job to ensure that doesn't happen again.”
Long-term outlook
Hauser stressed that the central bank’s focus was not on short-term movements in inflation, but on ensuring price growth returned sustainably to within the inflation target over the next one to two years.
He said: “We’re not targeting inflation today. We’re trying to target inflation in one year or two years’ time.
“In judging the outlook for inflation, we don’t just take account of current inflation, not least because that number at the moment, as you know, is a brand-new monthly series that we’re all still trying to work out.
“It’s also because the outlook for inflation depends not just on the inflation number today, but on the pace of demand, on conditions in the labour market, on global conditions and five or six other variables.”
This November CPI print was just the second set of full monthly data that the Australian Bureau of Statistics has released.
The December quarter data is set to be released on 28 January, which the RBA has said it would place more weight on due to its better historical understanding.
The major banks have forecast the trimmed mean inflation rate in the December quarter to be between 0.8 and 0.9 per cent, quarter on quarter.
Even then, Hauser warned against oversimplifying the data.
“We don’t have a rule that says if it’s 0.9 we hold and if it’s one we raise or 0.7 we cut. We take a view about the whole economy,” he added.
“I think our current view is that inflation in the December quarter of 2025 is probably likely to come out just a tiny bit higher, in an underlying sense, than that number that we had in November.”
What could cause a rate cut?
Hauser outlined two situations that could trigger rate cuts.
He said: “There would be a scenario in which demand weakens, let’s say there’s a global shock or the labour market loosens sharply.
“In those circumstances, that would be us cutting rates into weakness, that would be an unwelcome outcome.”
Hauser also said that rate cuts later in 2026 remained possible if the economy proved capable of growing faster than expected without generating inflation, though he stressed this was not the RBA’s central view.
He added: “It’s possible in that scenario that actually we’re cutting rates against strength rather than weakness. I’d love that to be an outcome, but it’s not currently our central case.”
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