Mortgage holders should expect interest rates to stay high for longer, whether or not the Reserve Bank of Australia (RBA) raises them again on Melbourne Cup day. The RBA says intense global competition for capital from AI and data centre companies is lifting the neutral rate, and Assistant Governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad. At 4.6%, the cash rate is the highest in 15 years; markets still almost fully price in another rise by mid-2027 and do not expect rates to fall before mid-2028. CBA chief economist Luke Yeaman said heavy government and AI spending makes rates less effective at curbing demand, while HSBC chief economist Paul Bloxham urged the federal government to cut spending in its mid-year fiscal update in December.
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Related tickers and likely impact
DXY
▲ Likely positiveRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/16/2026 | 101.78 |
| Change that session | -0.20% |
PAXG/USDT
▼ Likely negativePAX Gold
Relevance: low
| Market | Crypto |
|---|---|
| Exchange | Binance |
| Sector | Real-world assets |
| Market cap | $1.8B |
| Close on 10/18/2026 | 4,178.90 |
| Change that session | +0.57% |
QQQ
▼ Likely negativeInvesco QQQ Trust
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/16/2026 | 709.82 |
| Change that session | -2.50% |
SPY
▼ Likely negativeSPDR S&P 500 ETF
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/16/2026 | 763.31 |
| Change that session | -1.10% |
XAUT/USDT
▼ Likely negativeTether Gold
Relevance: low
| Market | Crypto |
|---|---|
| Exchange | Binance |
| Sector | Real-world assets |
| Market cap | $3.4B |
| Close on 10/18/2026 | 4,178.07 |
| Change that session | +0.60% |
XAU/USD
▼ Likely negativeRelevance: low
| Market | Gold |
|---|---|
| Close on 10/16/2026 | 4,165.63 |
| Change that session | -0.13% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Higher for longer : why low rates are relics of the past
Mortgage holders should expect interest rates to stay high for longer, whether or not the Reserve Bank of Australia (RBA) raises them again. The RBA warns that intense global competition for capital from AI and data centre companies is pushing up the neutral interest rate, and assistant governor Christopher Kent says there is reasonable evidence neutral rates are rising in Australia and abroad. The cash rate is 4.6%, its highest in 15 years, and markets do not expect rates to fall below current levels until at least mid-2028, with another rise by mid-2027 almost fully priced in. The term premium has climbed to a 12-year high, and Commonwealth Bank chief economist Luke Yeaman argues that higher government and AI spending makes rates less effective at curbing demand. Federal government spending reached 26.9% of GDP in 2025/26, the highest in 40 years excluding COVID-19, and HSBC's Paul Bloxham urges further spending cuts in the mid-year fiscal update expected in December.
- Higher for longer : why low rates are relics of the past
Mortgage holders should expect interest rates to stay higher for longer, whether or not the RBA hikes again on Melbourne Cup day. Assistant Governor Christopher Kent said neutral rates are rising in Australia and abroad, driven by intense global competition for capital from AI and data centre companies. The cash rate is 4.6%, its highest in 15 years, and markets have almost fully priced in another rise by mid-2027 and do not expect rates to fall below current levels until at least mid-2028. The term premium has climbed to a 12-year high, tightening financial conditions. Federal government spending reached 26.9% of GDP in 2025/26, the highest in 40 years excluding COVID-19, which economists say is weakening the effectiveness of interest rates in curbing demand.
- Higher for longer : why low rates are relics of the past
Mortgage holders should expect rates to stay higher for longer, as the RBA warns that competition for global capital from AI and data centre companies is lifting the neutral rate. Assistant governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad, and the 4.6% cash rate is the highest in 15 years. Markets almost fully price in another rise by mid-2027 and do not expect rates to fall below current levels by mid-2028, while the term premium has hit a 12-year high. CBA chief economist Luke Yeaman argued that heavy government and AI spending makes rates less effective, so the RBA would have to hit households harder, and warned that loose fiscal policy would force it to push rates higher still. Federal government spending reached 26.9% of GDP in 2025/26, the highest in 40 years excluding COVID-19, and HSBC's Paul Bloxham urged further cuts in the mid-year update due in December.
- Higher for longer : why low rates are relics of the past
Mortgage holders should expect interest rates to stay higher for longer, whether or not the RBA lifts them again. The RBA says intense global competition for capital from AI and data centre companies is pushing up the neutral rate, and assistant governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad. The cash rate is now 4.6%, the highest in 15 years, and markets have almost fully priced in another rise by mid-2027, with no expected falls below current levels before mid-2028. Economists Luke Yeaman and Paul Bloxham link high government spending, at 26.9% of GDP in 2025/26 and the highest in 40 years excluding COVID-19, to weaker rate effects, and Bloxham urged further federal spending cuts.
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Deloitte Access Economics forecasts that underlying inflation in Australia will have been above the Reserve Bank's 2.5% target for a full seven years by late 2028, when it is finally tamed. Governor Michele Bullock faces growing questions about whether blunt interest-rate policy is effective. At the press conference after September's rate rise, she was asked whether monetary policy had become detached from the problems it is meant to solve. She responded that rate increases affect far more than mortgage holders.
- France and the U.S. share the same debt trap. Only one has a global lifeline.
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