And that’s no criticism of the conversation between Hauser and ABC business editor Michael Janda, which had the deputy offering some candid insights into the RBA’s thinking.<\/p>\n
But Hauser did hedge his bets enough to leave it ambiguous whether a rate hike was imminent or more of a threat on the horizon.<\/p>\n
If market pricing and consensus forecasts are to be believed, the horizon is closing in, and there will be a rate hike at 2:30pm AEDT this afternoon.<\/p>\n
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Markets are pricing in an 0.25 percentage point rate hike at the RBA’s February meeting. (ABC News: Eric Hao Zheng)<\/p>\n
‘Just a tiny bit’ or ‘spectacularly high’?<\/p>\n
In his January sit-down, Hauser was, on one hand, emphatic that inflation above 3 per cent was clearly too high.<\/p>\n
On the other, he made light of the idea that the central bank board had a particular inflation threshold in mind that would prompt it to hike or hold.<\/p>\n
He was at pains to emphasise that there was yet to be a great shock \u2014 he expected December quarter underlying inflation to come in “just a tiny bit higher” than the RBA’s most recent set of forecasts proffered in November.<\/p>\n
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Of course, the interview was conducted before the latest inflation data were released.<\/p>\n
Among the slew of monthly and quarterly figures, headline numbers and trimmed means, the ABS delivered one truth \u2014 inflation is hotter than the RBA had forecast<\/a>.<\/p>\n Rate hike will be a ‘bitter pill’, advocates say<\/a><\/p>\n Consumer advocates fear a rate hike when the RBA board meets next week could be the “straw that breaks the camel’s back” for borrowers in mortgage stress.<\/p>\n In November, the RBA forecast headline inflation to come in at 3.3 per cent in the year to the December quarter, while the less volatile trimmed mean measure was forecast at 3.2 per cent.<\/p>\n In reality, the consumer price index (CPI) rose to 3.6 per cent annually for the December quarter, while the trimmed mean came in at 3.4 per cent.<\/p>\n Does that constitute “just a tiny bit” above forecasts or “spectacularly high”, to use Hauser’s language?<\/p>\n The judgement of financial markets and economists is near universally the latter.<\/p>\n As Commonwealth Bank’s chief economist, Luke Yeaman, put it, “the game has now changed \u2014 and quickly”.<\/p>\n Can’t say they didn’t warn us<\/p>\n There’s been a bit made of the short turnaround time between cutting and hiking, if the RBA lifts the cash rate today, having cut just six months ago in August.<\/p>\n Yesterday, Alan Kohler wrote that the average time between a last cut and first hike for the RBA was 10 months<\/a> \u2014 tighter turnarounds have included just four months during the tech-wreck of the early 2000s.<\/p>\n So should the RBA be concerned about the optics of changing tack so rapidly, outside of a major crisis?<\/p>\n (Crisis being a relative term, of course \u2014 this is the Trump era, after all, and to risk inducing pandemic-PTSD, the times are quite unprecedented).<\/p>\n With the Trump administration in the White House, financial market and policy turbulence has become commonplace. (Reuters: Nathan Howard)<\/p>\n But as CBA’s Yeaman titled his note<\/a>, “When the facts change, I change my mind”, borrowing the quote attributed to John Maynard Keynes.<\/p>\n The RBA has already buttered us up for its shifting stance.<\/p>\n In December, Michele Bullock couldn’t have been clearer<\/a> about what the RBA wouldn’t be likely to do in 2026, and that was cut rates.<\/p>\n Its communications strategy has become much more open in recent years, largely thanks to the advent of regular post-meeting press conferences by the governor.<\/p>\n You’d forgive Bullock, like Hauser, for being reticent to provide anything resembling time-based forward guidance, but there has been little doubt left as to the direction of the next move.<\/p>\n If the RBA does hike today, you can’t say they didn’t warn us.<\/p>\n Hike or hold to hinge on inflation forecasts<\/p>\n It’s worth noting the RBA’s economic forecasts take into account market views on where interest rates are heading.<\/p>\n When the central bank’s economists issued their forecasts in November \u2014 the ones left in the dust by the recent CPI figures \u2014 markets expected interest rate cuts.<\/p>\n Loading<\/p>\n As RBA deputy Hauser observed in his interview, even with lower rates factored in, the RBA expected inflation to return to its target band after a short-term spike \u2014 by late 2026 on an underlying level, and early 2027 for headline inflation.<\/p>\n He made a point to highlight this, presumably for a reason \u2014 as a way of demonstrating that even though inflation is above target, it had been forecast to come down even with less restrictive interest rates.<\/p>\n With rate cuts now well and truly off the table, could RBA economists conceivably see inflation returning to target \u2014 from a higher peak \u2014 at current policy settings?<\/p>\n![\"Donald](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/31bd4965b89b998361a6e5cd533d7438.jpeg\")
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