Has there been an interest rate rise more desired by some economists and commentators despite no real reason, than the one pushed for on Tuesday? Alas, the Reserve Bank listened to the noise and felt compelled to raise the cash rate to 3.85%, but one wonders if they listened more to the noise of the commentariat than the data.

In Tuesday’s announcement, the RBA monetary policy board barely changed anything from its December statement.

In December the board thought: “While inflation has fallen substantially since its peak in 2022, it has picked up more recently”. Now it says: “While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025.”

That is a weird statement given that we have had two inflation releases since then – the one for November showed 0% inflation and the December one had 1%, but all that was due (as I noted last week) to holiday travel (ie the Ashes).

There was, however, one very interesting new addition to the RBA’s statement on Tuesday. The board noted: “More recently, the exchange rate, money market interest rates and government bond yields have risen following a rise in market expectations for the cash rate.”

It’s hard not to read that as the RBA saying: well, the speculators expected us to do it, so I guess we better.

And over the past........

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