AMP chief economist Shane Oliver discussed Australia’s economic outlook, focusing on inflation, interest rates, and the potential role of fiscal policy in managing inflation. Oliver expects the Reserve Bank of Australia (RBA) to hold interest rates steady for the next year, with the first rate cut possibly coming in November 2027. He argues that governments should consider higher superannuation contributions, temporary tax increases, and cuts to public spending to ease inflationary pressures, rather than relying solely on interest rate hikes.
The conversation also touched on Australia’s housing market, where falling prices, higher borrowing costs, and weaker consumer confidence are creating challenges. Oliver forecasts a peak-to-trough decline of around 15% in dwelling prices and notes rising vacancy rates and slower rent growth in the rental market.
Turning to the US midterm elections, Oliver and host Marius Mariton analyzed the Democrats’ gains in Congress and the potential for continued political gridlock. They discussed the implications for Donald Trump’s policy agenda and the risks of another US government shutdown. Additionally, they explored growing resistance to data centres in the US, which could slow expansion and force tech companies to invest more in their own power infrastructure.
Oliver cautioned against overinterpreting the midterm results ahead of the 2028 presidential race, emphasizing the need for a measured approach to economic and market implications.