FEAR & GREED | Business News Q+A: This economist is calling for a 0.4pc rate hike next week
Jan 28, 2026
Warren Hogan, economist and MD of EQ Economics and advisor at Judo Bank, explains why inflation has jumped and why he thinks a 0.4% rate rise is needed next week. He discusses where the RBA went wrong and how labour shortages and fiscal choices changed policy trade-offs. He outlines a path of aggressive tightening and how businesses can prepare.
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Act Fast With A Significant Rate Hike
- Raise the cash rate quickly to stop inflation from becoming entrenched.
- Warren Hogan recommends a 40 basis-point hike next week and faster action thereafter.
Wrong Reference Point For Normal
- Economists used the post-GFC-to-pandemic era as their 'normal' benchmark and misread current conditions.
- Structural shifts like demographics and labour shortages mean the old reference point is wrong.
Labour Shortages Change Policy Risks
- Labour markets have flipped from excess supply to chronic shortages, changing macro risks.
- That shift raises upside inflation risks and changes how monetary policy should respond.