Moody's Analytics reported that the Reserve Bank of Australia is anticipated to raise interest rates on Tuesday. The agency believes that, following December's labor market and inflation data significantly exceeding expectations, the central bank is expected to abandon its easing cycle and increase the overnight cash rate by 25 basis points to 3.85%. The agency stated that while the rate hike may dampen short-term consumer confidence, spending sensitive to the housing market, and non-essential services, the cost of not acting would be higher risks to growth as inflation cools.