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Everyone thinks the RBA is about to cut interest rates. The media is telling you.

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The banks are telling you. Even the government wants you to believe it. But

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they're all wrong. And if you believe them, if

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you borrow more, if you buy a property, if you think your mortgage is

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about to get cheaper, you're about to get blindsided. Here's

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what nobody's telling you. The RBA is actually trapped. Inflation

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isn't dead, it's just hiding. And the data that's coming in over the last,

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you know, few months, it's going to force them to do the one thing

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that will shock every single Australian homeowner. They're

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going to actually raise rates, not cut them. raise them. I

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know that sounds insane, right? Because you're so used to low rates. I

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know it goes against everything you're hearing, everything they're telling you, but

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I'm going to show you exactly why it's about to happen. The data they're looking at,

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the pressure they're under, and what you need to do right now to protect yourself

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before it's too late. late. I'm Lloyd James Ross, seven figure investor and

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entrepreneur and I've helped thousands of business owners and professionals turn

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financial stress into success. If you're stuck in old money

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habits, overwhelmed by investing or unsure where to start, this

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is for you. I'll give you the mindset and strategies to take control,

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grow your wealth and achieve financial freedom. It's time to

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make your money work for you. At its most recent meeting, the RBA held

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the cash rate at 3.6% and explicitly said

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it did not consider cutting rates. That's not the language of

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a bank about to loosen policy. So here are the

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key facts. Rates were cut three times in 2025. which

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they shouldn't have been, but they were. And then they stopped at 3.6%. The

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RBA's inflation forecasts have been nudged higher into

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mid-2026, which is this year. And the deputy governor, Andrew

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Hauser, stressed that inflation is still too high, as we know. It's in the

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threes, right? When a central bank stops cutting and puts inflation

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first, markets start to price in rate hikes instead of all the

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relief. So why the no-cut

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story is probably now ending? Inflation

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isn't gone. It's just cooling temporarily. And

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the latest monthly CPI report showed that inflation did

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ease somewhat. It went down from 3.8% to 3.4%, but it's still

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above the RBA's 2% to 3% target. That's what

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they're targeting. 2% is the best, meaning there's still some pressure there.

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So core inflation still weighs heavily on the RBA's decisions. So

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yes, inflation has slowed a little bit, but that's not yet in

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the zone where cuts can make sense now at all. In fact, they

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made that mistake last time when they should have left rates at

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4.1 and they cut them right down to 3, but they should have just left them. And they restocked

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inflation. So the notion that easy cuts are

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coming across 2026 is fading. And everybody knows that

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now. Hikes are starting to creep into the forecasts. They're assuming that

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hikes are going to happen this year. So market economists are starting to flip

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Yeah, the big four banks are now, they're all split. Some

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are forecasting a 25% point hike as

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soon as next month, February, right? Others are still seeing a

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bit of a hold. But economists are warning that the RBA

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may raise rates at least twice in

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2026, right? Persistent underlying inflation will force them to do

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that. So it's not random chatter.

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It's not just speculation. It's becoming more of a consensus now

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across the board. And what does this mean for your money? What

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does this mean for your personal finances? So if you're a mortgage holder,

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particularly if you've just recently grabbed the mortgage, arguably,

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what could possibly be not a really good time? Record high houses.

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mortgage rates fairly low still, and you're like, yeah, I've got

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my house, and then bang, you're going to get hit with some rate hikes, right? Like, why is

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my mortgage going up? I didn't understand what interest rates mean. This is what most people do.

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They jump into the housing market because they get FOMO. They want to go through the

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rite of passage in the Australian life of owning a home.

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If you don't own a home, you're a peasant. And they want to make sure they're not peasants, so

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they go and get a house. There's other reasons why they buy houses, too. I get it. But a

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0.25% rate hike will

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add to the repayments obviously. And people won't realize that until it happens, especially

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again if you're a high debt household, meaning you've just acquired

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a home and you're already challenged to meet the repayments. So

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that's for homeowners, that's for people who own a mortgage. What about for

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consumers? Well, it's good for us. The

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consumer Confidence will dip if rates go

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higher, which reduces spending. Now, the whole idea of

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that is that so inflation falls. Now, if you're a consumer, it means

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you can start buying maxi bonds without having to mortgage your house and get one. It

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means you can buy maxi bonds for less than $6.60. It just means that

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maxi bonds aren't gonna go up. And I know that's the most important thing as a consumer. When

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you go into the corner shop and you go to get your maxi bond, you don't really wanna

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be paying 10 bucks for it. Now, if we don't get in front of this and hike

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rates, you're gonna be paying 20 bucks for a maxi bond. And

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I know you don't want that. I don't want that. So as

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a consumer, we want rates to go higher. The unfortunate thing is most

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consumers are mortgage holders too, or a lot of them are. And

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so you're like at this impasse, like I want rates to go up because I want to have my maxi bond,

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but for not paying too high a price for it, but I also want to

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make sure I don't get hit with my mortgage. It's a hard

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place to be. What about as an investor? Well, interestingly,

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when rates go up to curve inflation, assets

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fall. So this is very much an inverse correlation with interest rates. And

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people don't understand this too, but it's a very important macroeconomic principle.

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It's physics. It's mathematics. It's not up for debate. When

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rates go up, asset prices fall. I've done a number of

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episodes. Go back and check out all our episodes. I've done a few episodes

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on the specifics of this. So if rates start to go up,

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property prices will come off the ball a bit. I think too,

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based on what happened in Bondi recently, if a new government

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is formed with One Nation, and I'm pretty certain they

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have a good chance to win. They're starting to edge in

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front of the liberal coalition. If

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they win, if another party, no

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matter who it is, comes in, they're going to drop immigration down below 100,000. Now

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if that happens, less people, less demand for housing. So that's

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going to cool prices. The other thing is inflation will, if

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they need to get hold of inflation, they'll increase interest rates, which I'm talking about right now. That

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will curb property prices because people won't be able to borrow as much to buy. Plus

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they won't want to have more mortgage repayments. So demand for property

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fueled by debt will fall and prices will fall or

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they'll stabilize as a result. Now, as rates go

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up too, there'll be more support for the Australian dollar. Now, you don't have to be a genius to

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see in the last few months, the Australian dollar has gone from 61 US cents

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to 67 US cents. So there's been like a 10% increase

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in the value against the USD and other currencies of the Australian

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dollar. And the reason why that's happening is because interest rates are going to go up. So in

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a country, whenever you increase interest rates, you increase the returns people

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get on the bonds when they put money in the country. So it's increasing the demand for

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our Australian bonds. And that means that effectively, Australian

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dollars gonna increase in improving value against the other currency

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So if you're someone who likes to travel to America, you're gonna get more American dollars for

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your Australian dollars Okay, the other thing that's gonna happen is capital is gonna shift into

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you're bearing assets again like bonds and turn deposits So people are gonna start

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putting money in different places, which means they'll pair it a little bit out of the stock market,

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too so you're gonna see price stabilizational falls

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Maybe fall, but I think stabilization in property because the demand is still there.

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You're going to see falls maybe or stabilization in the stock market. You're

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going to see other assets fall. You're going to see bonds rise

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in demand. So you're going to be rising in prices and bonds and turn deposits will

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become more popular. That's what will happen in terms of the investment landscape.

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Just quickly, if you're ready to take control of your finances but feel stuck on

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where to start, I have a solution. My book, Money Buys Happiness,

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simplifies investing and wealth building with practical steps to help

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you achieve financial peace. Get your copy via the

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link in the show notes and let's get your money working for you. Now back

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to the episode. So this isn't just about rates

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changing, it's about changes of how money's flowing

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through the entire economy, yeah? Now, why the

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RBA might actually pull the trigger on this and

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increase rates. If inflation stays above the target, which it

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looks like it's going to, and household spending remains solid, which by

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the way, you just go to the corner shop and you see if household spending is high. My

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wife recently went to a concert and people were paying $300 for a VIP ticket that wasn't

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even VIP to drink beer out of plastic cups. I think it's pretty

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solid. I don't think that's going to wane. Even

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with a 0.25% increase, there seems to be no

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end to people spending money. It's just crazy. I

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think that's going to remain solid. That's going to increase the likelihood of a

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rate increase. Household spending growth is

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really what's still buoyant. It's going to really probably

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force their hand. We've got to look at

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the labor market, the jobs market, right? It's not collapsing. Unemployment's

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actually edging... A little bit higher, but not

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really sharply, which is interesting. In fact, recently it just came down. So,

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if unemployment was going up, the RBA is like, oh my God,

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we can't do this and increase rates because we're going to exacerbate the

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unemployment. But the reality is it's not. So, there's all

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these factors like the spending is still high, the

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jobs are still there, so there's not unemployment increases. Inflation is

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still sticking high and assets are at all-time highs. Like, the reality is

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that the RBA is completely justified for increasing the

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interest rate. It makes so much sense, right? So the RBA's job

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is not just to guarantee the cheap money, of course, it's to actually manage... The idea

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is to... Manage two things, unemployment and inflation. That's

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pretty much what it's there for, okay? To avoid big crashes. So

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here's the big mistake that most Aussies are gonna make. Most people are betting

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on rate cuts. And of course they want them to cut because they all want debt

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and property. They want property to keep going up. So like, hey, cut rates. They all do

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little dances on TikTok when they cut rates. So whether you've got a mortgage

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or you've got investment decisions, people are wanting lower rates because

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it's cheap money and that fuels asset prices. and

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who doesn't want to get richer, right? But they're not pricing in cuts and

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inflation is still above the target. So consumer sentiment really and household

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debt really remains somewhat fragile at this point because it is inflated

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and we will see rates go up at some point. So by

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the time that happens in the market or people admit it, the

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moves are typically priced in. So, if

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you want to stay ahead of the Australian economic turning points, stay

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close to this channel. Because I do these like every month, we're doing

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more of these and I'm really our fingers on the pulse when it comes to

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the economy. In fact, If you go back and listen to my last few episodes

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on this before all this stuff happened, we've been very accurate with

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our anticipation of what the RBA will do. Go back. I challenge you. Go back and look

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at the episodes, listen to what happened, and then go track what happened. It's

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fairly obvious to see what needs to happen because a lot of people don't

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look at the primary data. They don't look at Maxibon prices when

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they're in the BPI, but I think when I see them, I'm like, why did I just pay $6.60 for

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that Maxibon? That's interesting. Why is my McDonald's meal

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$30? Why? They're not understanding that that's that it's

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huge inflation. And it's not even like small, it's more than 3%. So you don't

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have to be a rocket scientist to work it out. But then because I'm

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not a mortgage holder, I'm completely objective. I'm

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a property bear. At this point in time in the cycle. I

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just don't think there's many of me around. I think when you tune into our channel,

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you're going to get a very objective opinion without me being

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influenced too much by owning housing. I don't even own

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a house. I don't even own any property. If you want an unbiased objective

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opinion with some data that backs it up, some

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real current data about what's happening in the Australian economy and

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how that affects you, subscribe to this channel because I'm not here to BS you,

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right? I got no reason to. So yeah,

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hit the subscribe button, share this with a friend. See you in the next episode. Leave us a comment below and I'll

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see you soon. Thanks for listening to Money Grows on Trees. If you enjoyed the episode,

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leave a five-star review on Apple Podcasts and Spotify and

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subscribe to us on YouTube so you never miss an episode. And

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if you're serious about building wealth, make sure to check out the links in the show

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notes and follow me on all social media platforms at