Tags
Economic Updates
date
January 28, 2026
December inflation came in well above the RBA’s forecasts, putting the sword to the “narrow path” narrative and bringing forward the risk of rate hikes.
For December 2025:
🔔 Headline inflation: 3.8% YoY
🔔 Trimmed mean: 3.3% YoY
🔔 Tradables: 2.1%
🔔 Non‑tradables: 4.6%
With inflation and wages both running hotter than expected and the labour market still relatively tight the board will have to perform some pretty impressive gymnastics to justify not increasing rates. A U-turn is starting to look inevitable.
That being said, I think the RBA will hold next week. A hike now effectively commits the RBA to a follow‑up move, and they can point to mitigating factors like the stronger AUD as justification to sit on their hands until March.