Economic and event calendar in Asia Friday, February 6, 2026. RBA Governor Bullock speaks.

The Reserve Bank of Australia (RBA) kicked off 2026 by raising the official cash rate by 25 basis points to 3.85 per cent at its first Board meeting of the year on Tuesday 3 February, marking the first rate increase in over two years. The decision reversed part of the easing cycle seen during 2025 and reflected a shift in the Board’s assessment of inflation and economic momentum.

The Bank’s official statement highlighted that inflation has picked up materially over the second half of 2025. Underlying price pressures and strong private demand have proved stickier than previously expected, with capacity constraints and a tight labour market contributing to ongoing price rises. The Board judged that inflation is “likely to remain above target for some time,” and that the cash rate was no longer at the right level to return inflation to the RBA’s 2-3 per cent target within a reasonable timeframe.

Governor Bullock, who will face questions from MPs today, has signalled that data will continue to guide future decisions, emphasising the need to balance inflation control with sustainable economic growth. Markets and many economists have interpreted the February move as the start of a renewed tightening cycle, with consensus expectations pointing to another hike at the May 2026 policy meeting, potentially lifting the cash rate further toward mid-4 per cent territory should inflation data prove resilient.

Today’s parliamentary hearing provides a chance for Bullock to elaborate on the RBA’s inflation outlook, the risks it sees in domestic demand, and how it interprets recent labour market and pricing signals, all key inputs for whether the Bank will follow through with another increase in May.

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Further background on this, posts from the day of the hike:

And, on that May rate hike consensus, there’s a chance the next hike will come sooner: