Inflation pressures are back in focus after the Reserve Bank of Australia raised rates by 25 basis points to 4.60%, with policymakers saying further tightening remains possible if needed, according to BlockBeats on Sept. 29.
RBA move keeps inflation concerns in view
The report said Australia’s consumer and housing markets have cooled, but economic growth and inflation are still coming in above expectations. A Bitunix analyst said that dynamic, combined with higher energy prices linked to conflict in the Middle East and rising technology product prices driven by AI demand, makes it difficult for central banks to ease policy too early.
The point is broader than Australia alone. When energy costs and technology demand push costs higher at the same time, inflation can remain restrictive for global rate-cut expectations even if economic activity is gradually slowing.
Copper supply risk adds another layer
The commodities market is also showing deeper supply risk. Deutsche Bank said the United States has continued stockpiling copper on tariff expectations, reducing the spot supply available to other regions.
In an extreme scenario, the bank estimated that copper could rise to $22,050 per ton in the second quarter of 2027 if the stockpiling trend continues, though it said this is not its base-case forecast. The more important issue, the report said, is that headline global inventories are not the same as freely circulating supply. If inventories are locked into a specific market, spot shortages can still push prices higher even without a large jump in demand.
That would add cost pressure to grid construction, AI data centers, and manufacturing.
Markets are watching costs and rates together
For financial markets, the report said both developments work through the same transmission channel. Higher energy and raw material prices can slow the decline in inflation and force central banks to keep rates higher for longer. If companies are hit at the same time by rising financing costs and higher input costs, valuation pressure from discounting future earnings also increases.
That is why the next market focus should not rest only on whether central banks cut rates. The report said investors also need to watch whether energy prices, industrial material supply, and long-end bond yields come under pressure at the same time. If cost-driven inflation persists while growth continues to slow, global markets could face a double strain from sticky inflation and elevated funding costs, with liquidity and valuations in risk assets also constrained.