Tomorrow's Macro Roadmap: JP services PPI, AU & EZ CPI report, Trump State of the Union speech, RBA, ECB & Fed speak
In Australia, the January monthly CPI indicator gets published three weeks after the RBA’s surprise 25bp rate hike to 3.85%. Consensus looks for headline inflation to decelerate to 3.7% y/y from 3.8%, but analysts warn that the headline could print as high as 4.0% y/y (0.5% m/m) due to the expiry of the National Energy Bill Relief scheme, which had been artificially suppressing measured inflation. The RBA’s preferred trimmed mean measure is expected at 0.3% m/m, holding the annual pace at 3.3%.
Four central bank speakers are scheduled alongside the ECB non-monetary policy meeting.
Recently, RBA Governor Bullock defended the Board’s decision to raise the cash rate by 25bps to 3.85% — the first hike since November 2023 — citing underlying (trimmed mean) inflation rising unexpectedly to 3.4% by December 2025, materially above RBA forecasts. She told Parliament that inflation “with a three in front of it” is unacceptable and emphasised that stronger-than-expected aggregate demand was pushing up against supply capacity. Today’s fireside chat follows just hours after the January CPI release, making it a critical opportunity for post-data forward guidance.
In his last speech, the Fed’s Barkin described the economy as “remarkably resilient” but stressed that inflation still remains above target and has been since 2021 — a sustained miss he said he “takes seriously.” He emphasised that today’s inflation numbers significantly influence tomorrow’s, signalling concern that inflation expectations may become unanchored. On the labour market, he flagged extreme concentration: 97% of 2025 net private-sector job creation was in healthcare and social assistance. He views tariff-related pricing power as constrained by competitive dynamics, suggesting firms may absorb costs rather than pass them through fully.
The Fed’s Musalem has taken a moderately hawkish stance in his recent comments, describing current policy as “well positioned” and calling rate cuts “unadvisable” given inflation at 2.8% — still above the 2% target. In his most recent appearance on February 20, he discussed the Supreme Court tariff ruling, noting that if replacement tariffs are “essentially one-for-one substitutes” for those struck down, his economic outlook would not change significantly. In his January 30 speech at the University of Arkansas, he estimated tariffs accounted for only about half of excess inflation above target through November. He expects inflation to resume its path toward 2% as tariff effects diminish later in 2026, but sees no urgency to ease policy. He views the labour market as at roughly full employment (4.4% unemployment) and sees continued economic resilience supported by tax changes and productivity gains.