\u201cI\u2019ve said a number of times before the problem in the housing market is a structural deficit of supply. That is the problem,\u201d she said. \u201cGovernments now get that, and you are seeing some action on that. But it\u2019s going to be slow to work its way through. So it\u2019s going to take time.\u201d<\/p>\n
The prospect of further deep cuts to rates ebbed after the RBA decision, with financial markets putting the chance of a cash rate at 3.35 per cent by year\u2019s end at just 40 per cent.<\/p>\n
![\"RBA](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/10\/99cdbf9ec850d544486a614eb6ac922f59f3fa9f.jpeg\")
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RBA governor Michele Bullock.Credit: Alex Ellinghausen<\/p>\n
Bullock said the economy was performing well, but the bank was taking out some insurance in case inflation pressures strengthened.<\/p>\n
\u201cI think the economy still is in a good spot,\u201d she said.<\/p>\n
\u201cI mean, we have inflation basically in the 2-3 per cent range. The unemployment rate is holding at around 4.2 per cent. We expect it will drift up a little bit, but we still expect it to be relatively low compared with history.\u201d<\/p>\n
Monthly inflation data rose to 3 per cent in August, prompting some concerns about inflationary pressures.<\/p>\n
Bullock warned that while the monthly data should be \u201ctaken with a grain of salt\u201d, it suggested there were a couple of areas, such as in housing construction, where inflation may be a little higher than had been expected.<\/p>\n
\u201cSo we\u2019re just being a little bit cautious about that,\u201d she said.<\/p>\n
Treasurer Jim Chalmers said the decision was \u201cnot the outcome millions of home owners would have wanted\u201d, while focusing on the three rate cuts since February.<\/p>\n
\u201cInterest rates have already come down three times in six months this year and that\u2019s a very good thing,\u201d he said.<\/p>\n
But shadow treasurer Ted O\u2019Brien said the government was to blame for the bank\u2019s decision to leave rates on hold.<\/p>\n
\u201cThis is a direct consequence of the Albanese government\u2019s spending spree,\u201d he said.<\/p>\n
The bank did note that there were positive signs the private sector \u2013 led by consumers \u2013 was taking over from the public sector in supporting the economy.<\/p>\n
The head of Deloitte Access Economics, Pradeep Philip, said that despite holding steady it was too early to declare the Reserve Bank had finished cutting rates.<\/p>\n
He said while there were some economic \u201cgreen shoots\u201d, they were unlikely to \u201cflower anytime soon\u201d.<\/p>\n
\u201cTo be clear, the economy is not overheating as some suggest to then argue that the RBA should delay or abandon rate cuts. In fact, the opposite is true,\u201d he said.<\/p>\n
\u201cThe reality is that with global growth a worry, Australia needs to get its fundamentals for growth right \u2013 more business investment, better risk appetite, more innovation.\u201d<\/p>\n