ABC News Daily Alan Kohler on the rate hike and the RBA’s mistakes
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Feb 3, 2026 Alan Kohler, ABC finance expert and journalist known for clear economic commentary. He breaks down the RBA’s surprise 0.25% hike and why last year’s three cuts looked questionable. He discusses the RBA’s higher inflation forecasts, how rate rises slow spending and the narrow path to a soft landing. He also explains how rate cuts and migration pushed housing prices up.
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RBA U-Turn After Inflation Re-forecast
- The RBA raised the cash rate by 0.25% to 3.85% because it now expects inflation to stay higher for longer.
- Alan Kohler says the RBA increased its inflation forecast for June from 3.2% to 3.7%, forcing the hike.
Prepare For Higher Mortgage Repayments
- Expect mortgage repayments to rise as rates increase and reduce household spending to curb inflation.
- Alan Kohler explains higher rates aim to slow spending, raise unemployment slightly, and lower inflation.
Rate Cuts Led To A Quick Reversal
- Cutting rates last year appears to have been a mistake because the RBA reversed course within six months.
- Kohler calls the quick turnaround a sign the cuts exacerbated housing price inflation and undermined credibility.