NAB Morning Call Get ready for rate hikes in early 2026
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Dec 16, 2025 Taylor Nugent, a NAB Markets economist, dives into the imminent RBA rate hikes expected in early 2026, emphasizing stronger growth and inflation risks. He discusses the surprising US payrolls data and the impact of unemployment rates on Fed cut expectations. The analysis of mixed global PMIs reveals a unique improvement in the UK, despite the Bank of England's cautious stance. Nugent also touches on consumer confidence linked to rate changes and previews an eventful week for central bank decisions.
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RBA To Raise Rates Early 2026
- NAB now expects two 25bp RBA hikes in Feb and May 2026, totalling 50 basis points.
- Taylor Nugent says this is a modest recalibration to rein in stronger-than-expected inflation and demand.
Inflation Surprise Widens In Q4
- Recent data show private demand outpacing RBA forecasts and inflation running too strong.
- Taylor says Q4 inflation likely surprised the RBA to the upside and is broader than earlier thought.
US Payrolls Were Mixed But Private Jobs Stabilise
- October payrolls fell sharply while November added jobs, leaving private payrolls stabilising around a 3-month average of ~75k.
- Taylor notes October was distorted by federal employee deferments and sampling issues from the shutdown.