The Reserve Bank of Australia's Monetary Policy Board is in the throes of its scheduled two-day meeting to consider the rocky path of Australia's cash rate.
The prospect of a November rate cut on Melbourne Cup Tuesday was effectively scuttled when last week's quarterly CPI data confirmed inflation was back on the rise.
Even before the figures were out, RBA governor Michele Bullock had told a business dinner that a quarterly increase of 0.9% in trimmed mean inflation - the RBA's preferred measure - would be a "material miss" of its forecasts.
When the number came in at 1.0%, economists, markets, and mortgage-holders alike understood any glimmer of an end-of-year rate cut had been effectively doused.
For some, so had the prospect of any further rate cuts this downcycle.
But as Ms Bullock has often reminded commentators, the RBA carefully considers all the economic data as it presents itself.
What about jobs?
While the trimmed mean inflation number of 2.9% is now uncomfortably out of the mid-range of the RBA's target band of 2-3%, there may be some discussion on climbing unemployment.
Australia's jobs market had been stubbornly tight for an extended period before recording a 4.5% unemployment rate in September, the highest in almost four years.
That too is above RBA and market forecasts, but it's fair to say the central bank board has clearly prioritised tackling inflation above all other balls it's juggling.
Households spending more
The board might also take note of new monthly household spending data released not long after its meeting got underway.
Official ABS figures shows household spending continues to rise in the wake of the three interest rate cuts already delivered for 2025.
The monthly Household Spending Indicator for September shows a 0.2% month-on-month rise - a seasonally adjusted 5.1% annual jump.
That compares to the modest annualised 1.4% recorded in September last year.
The spending jump is broadly in line with the CommBank Household Spending Insights (HSI) Index with its measure showing spending has grown 7.5% annually - its strongest rate since May 2023.
That said, the ABS data said it was spending on non-discretionary items, such as food, health, and petrol, that drove the rise while non-essential spending remained relatively flat.
In real terms (spending minus inflation), spending was up 2.7%, which NAB economists said placed the consumer on "a firmer footing than a year ago".
Will we ever see another rate drop?
So, with all bets off for a Melbourne Cup day rate cut, it raises the question of when - even if - we might expect to see the next cash rate cut.
On Friday afternoon, Westpac economists amended their outlook to expect two more rate cuts in the current cycle - in May and August next year.
"It will likely take more than one quarter to undo the shock of the September quarter CPI," Westpac chief economist Luci Ellis said.
She said a February rate is also unlikely unless the labour market deteriorates more than expected.
Westpac's revised outlook incorporates the stronger starting point for heated household consumption.
"Without further rate cuts, we anticipate this consumer recovery would fade quickly," Dr Ellis said.
"A slightly weaker starting point for the labour market also sees the peak for unemployment revised up to 4.6% late next year."
Of the other big banks, CommBank said the current 3.6% cash rate will remain unchanged for "a prolonged period", while NAB nominates the next cut will come in the June quarter of 2026.
ANZ is the only one maintaining a February rate cut is "plausible" but acknowledges it may not come until later in 2026.
Others, like HSBC economist Paul Bloxham, ruled out a cash rate cut in 2026 entirely, and said the next move could be upwards in 2027.
Time for tough talk?
With the November cash rate verdict likely to pose little competition to Cup Day, attention may turn to the accompanying Statement on Monetary Policy (SoMP).
These are released four times a year and include assessments of current economic and financial conditions and the outlook for the period ahead.
Many economists are tipping the statement to contain revised RBA inflation projections, not to mention a return to the hawkish tone underlying statements prior to the 2025 rate cuts.
This had moderated to more neutral territory in recent times, so it's not unexpected there may be a return to tougher language, particularly reminding us all of the need for vigilance in the face of resurgent inflation.
The RBA will hand down its decision at 2:30 pm (AEDT) on Tuesday with Ms Bullock's post-meeting media conference to begin at 3:30 pm.
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