As the Reserve Bank of Australia’s (RBA) first policy meeting of 2026 approaches, financial markets are increasingly focused on what the central bank’s next move on monetary policy may be.

The RBA lowered interest rates three times throughout 2025, bringing the official cash rate down to 3.6%. This easing cycle offered welcome relief to mortgage holders and property investors who have been grappling with high living costs and persistently strong property prices.

However, recent signs of rising inflation combined with a tight labour market have dampened expectations for further rate cuts in the short term. As a result, some market participants are now pricing in the possibility of a rate increase at the upcoming meeting scheduled for 2–3 February.

In a two-part series, Australian Broker canvasses industry perspectives on current market conditions and expectations surrounding the RBA’s next policy decision.