Last week, the ECB and the Bank of England both tipped pauses in their respective rate-hiking campaigns. The ECB’s February move was the penultimate hike, and the BoE’s tenth consecutive increase was the last for now.

Christine Lagarde will deliver another half-point hike in March then reassess, and the BoE said any additional hikes would be contingent on “evidence of more persistent [price] pressures.”

Although the hot US labor market is forcing traders to reassess their views about peak Fed funds (and how long Jerome Powell will be able to hold terminal), a pause from the Fed is all but assured after a presumed final hike in May.

One central bank which isn’t inclined to pause is the RBA, which on Tuesday hiked rates for a ninth meeting to 3.35%, the highest in more than a decade.

“It will be some time before inflation is back to target rates,” Philip Lowe said, in the new statement.

Back in December, in remarks accompanying the bank’s eighth hike of the cycle, Lowe included language that the RBA wasn’t on a “pre-set course.” The “pre-set course” talking point is a favorite among central bankers seeking to quell angst during periods of tightening. Powell employed it in his infamous January 2019 pivot. That language vanished from the February RBA statement.

Core inflation in Australia ran at nearly 7% in the fourth quarter. “Global factors explain much of this high inflation, but strong domestic demand is adding to the inflationary pressures in a number of areas of the economy,” Lowe said Tuesday.

The chart above suggests that whatever inflation is doing in other key markets, it’s accelerating in Australia.

The RBA sees CPI receding to 4.75% in 2023, which would still be well above the upper-end of the target range. It’ll be “around” 3% in mid-2025, according to the bank.

Lowe emphasized the tight labor market. The jobless rate in Australia is the lowest in almost half a century, vacancies are elevated, firms can’t find workers and the RBA expects wage growth to pick up commensurately. “Given the importance of avoiding a prices-wages spiral, the Board will continue to pay close attention to both the evolution of labor costs and the price-setting behavior of firms in the period ahead,” Lowe remarked.

The RBA is, of course, sitting atop a housing bubble, something policymakers are compelled to acknowledge as they ratchet rates higher. The February statement retained the same language around mortgage payments as December’s release. Insult to injury for households is the reverse wealth effect from falling home prices.

“The path to achieving a soft landing remains a narrow one,” Lowe lamented. “Further increases in interest rates will be needed over the months ahead.”

Readers will kindly recall that prior to the onset of the RBA’s hiking cycle, Lowe was reluctant to countenance the idea of any rate hikes in 2022 after the market forced the RBA out of its yield-curve control regime. For a time, Lowe insisted rates would stay at rock-bottom levels until 2024.

He came around, though. Last year’s hikes constituted the most acute tightening episode in Australia since 1989.