Reserve Bank of Australia

The Reserve Bank of Australia (RBA) is the central bank of Australia. It is responsible for maintaining price stability, full employment, and the economic prosperity and welfare of the Australian people. The RBA is currently newsworthy due to rising inflation figures, which have increased expectations of an imminent interest rate hike. Recent data shows inflation jumping to 3.8% in December, prompting economists and investors to anticipate the RBA will be forced to increase rates. The International Monetary Fund (IMF) also projects 'drawn-out' and 'above-target' inflation for Australia. RBA Governor Michele Bullock has indicated that further rate cuts are unlikely and that hikes may be necessary in 2026 if inflation persists. This situation is significant as it impacts mortgage holders and the broader Australian economy, potentially leading to a short rate cut cycle followed by renewed increases.