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Wealth Pi Fortnightly Economic Snapshot
Interest Rates
On 30 September, the RBA held the official cash rate steady at 3.60%, with the next policy meeting scheduled for 4 November 2025.
The hopes for an interest rate cut in November were dashed on Monday 27th when Reserve Bank Governor Michelle Bulloch made a point of highlighting inflation was still a concern for them and indicated they are in no rush to keep cutting rates. This saw the probability of a cut reduced from 67% to 39% chance. Additionally, the Governor implied that this was consistent with other central banks she recently met with on her global trip.
RBA
On 30 Sep 2025, the RBA Board decided to leave the cash rate unchanged at 3.60 per cent, citing a slowing in the decline of underlying inflation with both headline and trimmed mean within the 2 to 3 per cent range in the June quarter and indications that September quarter inflation may be higher than expected, alongside a recovery in domestic activity led by private demand, a strengthening housing market, and broadly steady labour market conditions with the unemployment rate at 4.2 per cent in August; uncertainty in the global and domestic outlook remains elevated. The decision was unanimous, and the Board reaffirmed its commitment to price stability and full employment, emphasising a cautious data driven approach and readiness to act decisively if risks to activity or inflation emerge.
Australian Markets
The Reserve Bank of Australia (RBA) released its October 2025 Financial Stability Review, providing a comprehensive assessment of the health and resilience of Australia’s financial system. The Review highlights that Australia’s financial system remains well positioned to navigate a period of elevated global uncertainty. The RBA identifies the largest risks to financial stability as stemming from abroad, including high and rising government debt levels in major economies, stretched asset valuations and leverage in global markets, and heightened geopolitical and operational risks. However, the RBA finds that Australian households, businesses, and banks are well placed to weather most shocks. Most households with mortgages are keeping up with repayments and have built savings buffers, while many businesses have established financial buffers. Australian banks continue to maintain high levels of capital and liquidity, positioning them to support the economy through potential disruptions. The Review also underscores the importance of maintaining prudent lending standards and strengthening operational resilience.
Global Markets
The global economy is adapting to a new policy landscape. Some of the earlier effects of higher tariffs have been alleviated by subsequent trade agreements and policy resets. However, the overall environment remains volatile, and temporary factors that supported economic activity in the first half of 2025 are fading.
The IMF’s October World Economic Outlook slightly revises near-term growth projections upward but still marks a downgrade compared with pre-policy-shift forecasts. Global growth is expected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026. Advanced economies are projected to grow around 1.5 percent, while emerging market and developing economies are expected to expand just above 4 percent. Inflation is forecast to continue declining globally, though with variation across countries, remaining above target in the United States and more subdued elsewhere.
Risks are tilted to the downside. Prolonged uncertainty, increased protectionism, and labour supply shocks could weigh on growth, while fiscal vulnerabilities and potential financial-market volatility also threaten stability. The report calls on policymakers to rebuild confidence through credible, transparent, and sustainable measures, safeguard central-bank independence, and advance structural reforms.
Property
As of October 2025, Australia’s housing market continued to record steady gains. National dwelling values increased by about 0.8 percent in September, the strongest monthly rise in more than a year. Values are now 4.7 percent higher than a year ago, led by Brisbane and Perth, while Sydney and Melbourne posted 0.6 percent monthly growth. Auction volumes reached 2,662 nationwide with a 73.8 percent clearance rate, indicating robust buyer activity. The national rental vacancy rate dropped to 1.4 percent in September, pushing rents 1.4 percent higher quarter-on-quarter. Although new listings rose 8 percent in early October, total advertised stock remained 19 percent below the five-year average. Data from realestate.com.au show that buyer search and enquiry levels have risen sharply, particularly in Perth, Brisbane and Adelaide, where supply shortages are most severe. These trends suggest market momentum is being driven by tight supply and active demand rather than broad-based price acceleration.
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