Burning inflation result curbs RBA pathway to neutral cash rate

High interest rates had previously succeeded in curbing demand, however the three interest rate cuts this year appear to have re-stimulated household demand, writes KPMG Australia Chief Economist Brendan Rynne.

As widely anticipated, the Reserve Bank of Australia (RBA) has kept the cash rate unchanged at the marginally restrictive level of 3.60 percent. The beyond 'material miss' inflation result for the September quarter all but sealed this outcome last week. KPMG's forecast suggests supply factors still dominate inflation, but demand factors rebounded in the quarter. High interest rates had previously succeeded in curbing demand, however the three interest rate cuts this year appear to have re-...

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Authors: Brendan Rynne

Published Date: 05 November 2025