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Australia's Q3 Inflation Accelerates, Crushing Rate-Cut Hopes

Australian consumer prices jumped by the most in 2-1/2 years in the September quarter as electricity and travel costs climbed, while a shockingly large increase in the core inflation reading seemed to rule out any imminent rate cuts.

Investors gave up any remaining hopes for a rate cut from the Reserve Bank of Australia next week, which is now just 8% priced in, down from 40% before the data. The chance of a cut in December is now seen as less than 25%.

Rates are seen bottoming at 3.35% by mid-2026 from the current 3.6%, implying just one last cut in the easing cycle...

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