Anyone sweating on no interest rate rises this year and praying for a cut shouldn’t give up hope. This is despite too many economists and newspaper headlines tipping rate rises are coming. And the consensus among the rate rise crew is two this year. But will they be right?

Economists are trained to forecast where the economy and important indicators (such as inflation, unemployment, interest rates, the dollar and so on) are going. However, because people and the economies they create are so complex, there’s still a lot of guessing when it comes to the predictions of economists.

However, what helps economists ‘guess’ better is critically important economic data. Between this week and next Wednesday, we should get the news that will break mortgage holders hearts or get them breathing a sigh of relief.
Of course, there’s a lot of economic news between now and February 3 when the RBA makes its first interest rate decision for 2026 but let me give you the dates and data drops that will make or break borrowers hearts and hopes. Here they are:

1. This Thursday (January 22) we see the latest unemployment number. If it’s a strong/good number it will encourage an RBA rate rise. A weak number helps keep rates on hold. A shock jump in the jobless figure would put rate cuts back on the table, but this is not expected.
2. On the following Wednesday (January 28), we see the December quarter Consumer Price Index. This has to deliver surprisingly good inflation readings for the RBA to stop hinting about the need to raise rates.
3. Other economic data will be looked at, such as last week’s consumer sentiment reading, which wasn’t good and coincided with talk about rate rises. But in the minds of RBA board members who decide on rate changes, unemployment and inflation are the main games in town.

Early in January I looked at the survey from the AFR’s Cecile LeFort, and this is what I deduced from the 38 economists’ predictions:
1. The CBA and NAB economics teams expect a rate rise next month, taking the cash rate from 3.6% to 3.85%.
2. 17 out of the 38 economists surveyed tip at least two hikes this year!
3. However, 16 out of this group see (wait for it) no changes in rates this year.
4. And it gets better for those praying for a cut. Nine economists see the cash rate below the current 3.6% by year’s end!
5. So, adding the ‘no change’ economists to the ‘rate cut’ economists, we now have 25 out of 38 economists not thinking that we’ll see a rate rise this year!
6. But wait, there’s more, with four economists seeing at least two cuts this year, with Yarra Capital Tim Toohey telling us that the cash rate might be 2.85% by Christmas this year!

As you can see, despite headlines and noisy economists in the news, interest rate rises are no certainty in 2026. The RBA doesn’t want to raise interest rates, but it will if the labour market looks strong and inflation isn’t falling. And that’s why data drops for these two economic indicators are the big watches for the next two weeks.

By the way, lower inflation that might stop rate rises and put rate cut speculation back in the news would be great for the stock market, which has underperformed many of the big global share markets. If this happened, it would be great for our super returns.