RBA’s Hunter Outlines Inflation and Labour Backdrop

• Yesterday, RBA Assistant Governor Sarah Hunter delivered a speech titled “Inflation, the Labour Market and the Path Back to Target.”
• The RBA’s central message was that the Bank does not see the recent period of elevated inflation as inconsistent with labour market tightness and other indicators across the economy.
• Separately, the latest reading on consumer price expectations moved higher, lifting to 5.0% in February 2026 from 4.6%, its highest point since June and a reminder that inflation sentiment remains elevated.
• That backdrop follows last week’s policy move, where the RBA raised the cash rate by 25bps to 3.85%, the first increase since November 2023.
• Globally, attention now shifts to the upcoming US January CPI release. Markets are positioned for a 0.3% monthly gain in both headline and core, a result that would slow the annual rate toward 2.5% and feed directly into expectations for the Fed’s next steps.