FEAR & GREED | Business News Q+A: Did the RBA have no choice but to hike?
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Feb 3, 2026 Deanna Messina, Deputy Chief Economist at AMP focused on Australian macroeconomics and monetary policy. She explains why the RBA surprised markets with a hike and why the unanimous vote raised eyebrows. She discusses whether the move is a one-off fine-tuning, upgraded inflation forecasts, and how government spending and policy shape demand and wage pressures.
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Hike Was A Close Call
- The RBA's rate hike wasn't inevitable and many economists, including Deanna Messina, expected a hold.
- The unanimous board vote surprised Messina and raises questions about independence in the decision-making process.
RBA Raised Inflation Forecasts
- The RBA revised up its inflation forecasts, lifting the trim mean to about 3.2% by year-end.
- Messina thinks those forecasts are too high and expects better inflation outcomes, so further hikes may not be necessary.
Described As An Adjustment
- Governor Michelle Bullock framed the move as an 'adjustment' not necessarily the start of a tightening cycle.
- Forward-looking business surveys also point to lower inflation ahead, supporting the view this could be a one-off tweak.