Global Tightening: The first shot becomes "rapid fire"? Pacific Bank Chief Economist: The Reserve Bank of Australia may raise interest rates continuously in March.

The Pacific Bank's chief economist and former assistant governor of the Reserve Bank of Australia, Lucy Ellis, warned that as the first major central bank in the world to start a tightening cycle in 2026, the Reserve Bank of Australia (RBA) may be forced to raise interest rates for the second consecutive time in March. The Reserve Bank of Australia was the first to raise interest rates this year on Tuesday. Traders and economists generally expect the central bank to take further action at the May meeting after the first quarter inflation data is released. For most observers, the threshold for immediate action next month is very high. "I cannot rule out the possibility of consecutive rate hikes in March," Ellis said in an interview on Wednesday. Her core forecast is also for action in May, but she added, "If the data flow from now until the March meeting shows stronger momentum, then this could happen." This week's rate hike marks a dramatic shift in Reserve Bank of Australia policy as the central bank is working to contain resurgent inflation. Before the next meeting, policymakers will carefully assess January inflation and employment reports, as well as fourth quarter wage and GDP data. The focus on action in May is because Governor Michelle Bullock has stated that the Reserve Rate Decision Committee will place more emphasis on quarterly inflation data rather than the newly monthly series that has not yet become a core data point. The next monthly data will be released on February 25. "If the situation roughly meets expectations, I think they will have the room to stay put and wait until May. But I also note that from the Governor's press conference, it is clear that the inflation trajectory in their forecast is unacceptable to them," Ellis emphasized, "They want to lower inflation more quickly."