Has there been an interest rate rise more desired by some economists and commentators despite no real reason, than the one pushed for on Tuesday? Alas, the Reserve Bank listened to the noise and felt compelled to raise the cash rate to 3.85%, but one wonders if they listened more to the noise of the commentariat than the data.

In Tuesday’s announcement, the RBA monetary policy board barely changed anything from its December statement.

In December the board thought: “While inflation has fallen substantially since its peak in 2022, it has picked up more recently”. Now it says: “While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025.”

That is a weird statement given that we have had two inflation releases since then – the one for November showed 0% inflation and the December one had 1%, but all that was due (as I noted last week) to holiday travel (ie the Ashes).

There was, however, one very interesting new addition to the RBA’s statement on Tuesday. The board noted: “More recently, the exchange rate, money market interest rates and government bond yields have risen following a rise in market expectations for the cash rate.”

It’s hard not to read that as the RBA saying: well, the speculators expected us to do it, so I guess we better.

And over the past month the odds of a rate increase on Tuesday changed rather dramatically.

Early in January there was almost no prospect of a rate rise after the October inflation figures showed an unexpected dip in inflation. In December, the governor of the RBA, Michele Bullock, told the media that “the balance of risk to inflation had tilted a bit to the upside”. But even with these words hovering over everything, the market only gave about a 20% chance of a rate rise.

This all changed on 22 January. And rather oddly the reason it changed was not due to any new data on inflation, but on unemployment.

On 22 January the December unemployment figures were released, showing a large drop in unemployment to 4.1%. That massively changed the outlook for a rate rise, and last week’s latest inflation figures didn’t really have anywhere near the same impact:

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The reason low unemployment drove speculators to bet that the RBA would raise rates is because the bank is very loud about suggesting that the labour market is “tight”. This is economic speak for there being too few people unemployed. Some economists (and everyone working for the RBA, it seems) worried about this because they believe it means employers will have to raise wages in order to attract and keep workers.

And if wages start going up faster, then so too, they argue, will inflation.

Thus, the low unemployment and the higher-than-expected inflation figures had some economists absolutely salivating for a rate rise. One in The Australian suggested the RBA needed to raise rates to “restore” Bullock’s “lost credibility”. Good thing economic commentators never have to worry about lost perspective.

And so the RBA raised rates and suggested they needed to do so because “growth in private demand has strengthened substantially more than expected, driven by both household spending and investment.”

Well, about that … As readers will recall, that surge in investment was almost all in AI datacentres. But even apart from the fact they are not great employers, private demand remains pretty weak:

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And let us also look at the fall in unemployment:

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Unemployment has now been below 4.5% for more than four years – long enough to argue that it should be below that as a matter of course.

But in December, there was an oddly large 0.2 percentage point drop in unemployment.

In the past 48 months a drop of that size has now only happened three times. Once in 2022 when the effects of the pandemic saw unemployment fall quickly for almost a year. The other time was in February 2024, when the rate fell from 4.1% to 3.7%, Funny thing though: by April the rate was back up to 4.1%.

At this point, no one has any real clue if unemployment in January and February is going to stay low or bounce back up. However, as I noted last week – the fact that job vacancy numbers seem to be falling suggests a rise in unemployment is the more likely outcome.

At any rate, are we seeing any signs of wages taking off?

The most recent wage price data is only up to September (the next figures come out in a couple of weeks). But here we see absolutely no signs of wages galloping upwards:

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Heck, in December the shadow treasurer, Ted O’Brien, was banging on about how real wages were falling – ie that wages were growing slower than inflation. He was right: in the September quarter real wages fell, and over the past year they were flat.

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But apparently a time when wages are growing slower than inflation is also a time when we need to raise interest rates in order to keep wages down.

Make it make sense.

The RBA failed to do so, and instead succumbed to meeting the desires of speculators and those who think more unemployment is a good thing for the economy.

• Greg Jericho is a Guardian columnist and chief economist at the Australia Institute