Bloomberg Daybreak: Asia Edition · Sep 28, 2026
With Illiana Jain, International Economist at Westpac
Westpac expects the Reserve Bank of Australia to raise its cash rate this week, and Illiana Jain said a much larger share of the consumer price basket is now rising faster than the central bank's target band.
The question on the program was whether the RBA would have to keep tightening until the war ends and oil prices settle. Jain said Westpac does not expect that approach, and forecasts one more hike, with the risk of a second.
"So this hike is really to ward off any comments or risks around complacency on policy."
Illiana Jain, International Economist at Westpac, on Bloomberg Daybreak: Asia Edition, covers economic and market developments in Asia and Europe for the bank. She also gave Westpac's view on the Fed, the US-China talks and Australia's budget.
The full segment is covered here so you can skip it.
Here are the 6 predictions that matter.
Key Takeaways
Inflation in Australia is broadening, not concentrated in one part of the economy
A much larger share of the CPI basket is growing faster than the RBA's target band
Westpac expects one more RBA hike, with the risk of a follow-up if inflation expectations rise
The property downturn is not what the RBA is watching, and it works mainly through consumer confidence
Sticky US services inflation should bring one more Fed hike in October
The US-China talks shifted from trade to security, which will not give markets the stability they want
The jump in bond yields is coming from the US, not from Australia's public finances
1. Why the RBA Hikes Now
The host introduced the segment by noting that the Reserve Bank of Australia has a rate decision this week and is expected to raise its cash rate because of persistently strong inflation.
Westpac expects a hike the next day
"So we are expecting that the RBA will hike tomorrow." — Illiana Jain
Jain said the decision comes down to the latest inflation figures and the bank's expectations for inflation.
"So we saw in that July print that inflation was not only high, but that inflationary pressures were broadening." — Illiana Jain
More of the price basket is running hot
"We saw that the percentage of the CPI basket that's growing beyond the RBA's target band is much higher than it was previously." — Illiana Jain
She said that puts the RBA in a difficult position, because it raises the risk that the third-quarter inflation figure comes in stronger. If the bank is not seen as taking inflation seriously, it could look complacent.
"So this hike is really to ward off any comments or risks around complacency on policy." — Illiana Jain
The aim, she said, is to get emerging inflation risks under control before they become a bigger problem to solve later.
