Australian interest rates

Following the Reserve Bank of Australia’s (RBA) decision to lift the official cash rate (OCR) by 25 bps on Tuesday, Treasurer Jim Chalmers was quick to place the blame on the private sector, rather than his own government’s policies.

Over the last cycle of immigration-led growth, inflation was endemically weak.

Warren Hogan, managing director of EQ Economics, published an article in the Australian Financial Review arguing that the Reserve Bank of Australia’s (RBA) monetary policy board has failed in its core mandate of price stability, allowing inflation to remain above target for five consecutive years.

As widely tipped by financial markets (~70% probability), the Reserve Bank of Australia (RBA) unanimously voted to lift the official cash rate by 25 bps to 3.85%: The increase will add roughly $110 to the monthly cost of servicing the average-sized $700,000 new mortgage.

ANZ job ads are in their strongest surge in three years. Labour demand often rises at the beginning of the year (the job advertisements series grew 6.2% m/m in January 2019 and 3.9% m/m in January 2017).

Exclusively from national treasure, Gerard Minack.

In this post-truth world, everything old is new again.

The latest interest rate futures pricing has Australia’s official cash rate sitting at 4.17% by the end of 2026.

Wednesday’s CPI inflation release for December was a shocker that, alongside the decline in the nation’s unemployment rate to 4.1%, suggests that the Reserve Bank of Australia (RBA) will hike the official cash rate at next month’s monetary policy meeting.

Alex Joiner, chief economist at IFM Investors, posted the following chart on Twitter (X) showing how underlying (trimmed mean) inflation in Australia has accelerated, raising the prospect that the Reserve Bank of Australia (RBA) will lift the official cash rate (OCR) by 25 bps at next month’s monetary policy meeting.

The December NAB survey has wiped out rate cuts for the time being.

Economists are debating the merits of interest rate hikes.

Westpac is unmoved by the good jobs report.

The odds of a near-term interest rate hike have increased dramatically following Thursday’s labour force report from the Australian Bureau of Statistics, which showed that headline unemployment declined to 4.1% in December, down from 4.3%.

Cotality has a rather hopeful press release. Momentum returns to the building sector The Cordell Construction Cost Index (CCCI) recorded a 1.0% increase in construction costs nationally over the December 2025 quarter, the strongest quarterly growth of the year.

Let’s take a look inside the new inflation spurt with Goldman charts.

TME with the charts.

I’d better say this before I am arrested in two days. The CBA Labour and Wage Report (is that a religious text I can quote from?) is a terrific leading indicator for wage growth.

Westpac measures headed for Hades.

Yesterday’s monthly inflation number was softer than expected, easing fears of a February rate hike.