What did the January CPI tell us about inflation?

Australia CPI January held at 3.8% year on year, while the trimmed mean rose to 3.4%. Both were hotter than expected and above the RBA’s 2 to 3% target. It signals sticky services inflation and keeps the australian inflation rate in focus for policy.

Will the RBA hike interest rates in May?

A hike is not a done deal, but odds have risen after the firm January core. The RBA wants clearer evidence that inflation is heading to target. If upcoming ABS inflation data and labour indicators stay tight, a May move remains on the table.

How could this affect my mortgage and repayments?

Stronger inflation keeps rates higher for longer. If the RBA hikes, variable mortgages could see higher repayments. Even without a hike, cuts may be delayed. Consider building buffers, fixing part of your loan, or increasing offset balances while the australian inflation rate remains above target.

What should investors watch next?

Focus on the next monthly CPI indicator, the quarterly CPI, retail sales, wages, and unemployment. These shape RBA rate hike odds. A clear fall in the trimmed mean would ease policy pressure, support bonds and rate‑sensitive equities, and point to a softer australian inflation rate later in the year.

Global Market Insights

Australia Inflation February 26: Hot January CPI Keeps RBA Hike Live

ByHuzaifa Zahoor February 26, 2026February 26, 2026

The australian inflation rate stayed hot in January, with headline CPI at 3.8% year on year and the trimmed mean at 3.4%. Both beats keep prices above the RBA’s 2 to 3% target band. Australia CPI January also firmed the RBA rate hike odds into May. ABS inflation data suggests price pressures remain sticky in services. We explain what this means for bonds, the Australian dollar, and rate‑sensitive shares, and how investors in Australia can position now.