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Financial markets are now pricing in a 100% chance the Reserve Bank will hike rates in 2026, in what would be a blow to mortgage holders but may take some steam out of an overheating property market.

The latest forecasts represent a turnaround from just two weeks ago, when traders were factoring in an even chance that the next RBA move would be a cut by its May meeting.

It comes as data showed inflation is now moving in the wrong direction, alongside this week’s national accounts and household spending figures which showed the economy is accelerating into the new year.

Adam Donaldson, the head of interest rates strategy at the Commonwealth Bank, said “the market has come to the conclusion that the Reserve bank won’t be cutting rates any further”.

“Basically, from February onwards, the market is starting to price some risk that rates will go up.”

Data from the Australian Bureau of Statistics showed consumer price growth jumped to 3.8% in the year to October – far higher than expected, and well above the top end of the central bank’s 2-3% target range.

The pain of higher mortgage costs would be a particular blow to the more than 85,000 first-home buyers this year who have enjoyed three rate cuts in 2025 but now face the prospect of higher repayments.

Chart showing changes to interest rate predictions over time

Sally Tindall, the director of data insights at Canstar, said there was a dwindling number of banks offering loans at interest rates of below 5%, and that she expected fixed rates to climb higher from here as banks factored in the shifting expectations around the RBA’s cash rate.

While outsmarting the banks was a hard task, Tindall said it was possible that fixing your mortgage at the lowest possible rate could work out for borrowers.

“If it suits your finances, right now, based on current forecasts, wouldn’t be the silliest time to fix – but the key is to shop around.”

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Three rate cuts this year have helped drive a rapid rise in home prices that has pushed affordability to its worst on record.

As first-time buyers rushed to take advantage of the federal government’s expanded 5% deposit scheme, property investors have flooded into the market.

Analysts at Westpac this week said they now expected property prices nationwide to rise by about 8% in 2025, and by as much as 14% in Brisbane and Perth.

But the changed outlook for interest rates means that instead of accelerating to 9% next year, national home values should instead climb by 6% – only cold comfort to those struggling to get on the property ladder.

All eyes now turn to Tuesday, when the RBA will deliver its final rates decision for 2025 and before the January break.

Analysts are confident the central bank’s board will hold the cash rate at 3.6%, but will be looking for any pushback against the financial market’s recent “hawkish” outlook.

While traders have moved swiftly to switch from predicting rate cuts to hikes, most economists believe the RBA is more likely to hold through 2026.

AMP’s chief economist, Shane Oliver, has “decided to give up on our view of another cut”.

But Oliver believes financial markets are overestimating the chance of higher rates.

Unemployment is trending higher, he said, which means the jobs market is still “a little bit soft”.

“There’s uncertainty around the reliability of the new monthly consumer price index, and consumer spending seems very dependent on getting discounts, which suggests a degree of fragility.”

The US has long sat at the centre of the global financial system, with the US dollar serving as the backbone of the world economy. Private investors rely on the dollar as a store of value in times of uncertainty.

Governments and central banks hold dollars to manage the value of their own currencies and as a form of insurance against economic shocks. Key commodities such as oil are also priced in dollars.

This dominant position, which has given the US enormous privileges including the capacity to borrow money cheaply and the ability to use the global financial system as a tool of statecraft, is often explained through the size and stability of US markets and the strength of its institutions. But beneath these economic fundamentals lies something more intangible: trust.

Countries and private financial institutions hold dollars, trade in dollars and borrow in dollars because they trust the US to maintain an open, rules-based international order. They also trust the US to honour contracts, protect property rights and manage the world’s financial plumbing responsibly by acting as an international lender of last resort during periods of crisis.

The dollar system has long had its critics. In the aftermath of the global financial crisis, which occurred between 2007 and 2009, emerging economies faced severe spillovers from US monetary policy and growing exposure to dollar-denominated debt. They also witnessed the increasing use of financial sanctions as a tool of US foreign policy.

China, Russia, India and other countries outside the west began constructing alternative financial infrastructures – new payment systems, currency swap lines and efforts to internationalise their own currencies. What began as a gradual search for some form of protection from US financial power quietly created cracks at the margins of the dollar-based system.

However, nothing has been as disorienting to the global role of the dollar as the second Trump administration’s overt attacks on the liberal international economic order. The imposition of sweeping trade tariffs, as well as efforts to undermine international and domestic institutions, represent a fundamental break with the promise of responsible American financial leadership.

Previous predictions of the dollar’s decline have proved premature. But as we argue in a recently published paper, the erosion of trust in the US as the steward of the liberal international order should be taken seriously. What we are seeing is not the immediate collapse of US financial power, but the beginning of a slow transition towards a fragmented, multipolar – and less predictable – global monetary system.

Rupture of trust

Three developments stand out. First, Washington’s commitment to the liberal economic order under the leadership of Donald Trump is being widely questioned. Rather than acting as the guarantor of open markets, Trump has reframed global trade as a transactional system where countries must “buy down” US tariffs. This means other countries must essentially now buy American Treasuries and other securities in exchange for access to the US market.

Second, surging US debt is increasing doubts about US fiscal stability. The Trump administration’s major tax cuts and spending plans are projected to create persistent deficits of around 6% of GDP, and US government debt has ballooned to record levels. This has prompted foreign central banks to reduce their dollar holdings.

Third, the Trump administration is openly attacking and undermining US government agencies and the country’s central bank, the Federal Reserve. Trump has repeatedly threatened to replace the current Fed chair, Jerome Powell, and dismiss other central bank officials since returning to the White House in January.

Central bank independence is considered a hallmark of credible monetary governance and undermining it raises doubts about whether the US remains a reliable anchor for the global financial system. According to Reuters, European officials are now openly questioning whether the Fed will continue to supply dollars to overseas central banks at times of financial strife.

Taken together, these actions are striking at the core foundation of dollar dominance: the assumption that the US will behave predictably, responsibly and with institutional restraint.

Despite the turbulence, no single currency is ready to replace the dollar. China’s renminbi still lacks open capital markets and strong legal protections, while the euro lacks a unified fiscal authority. New digital currency platforms remain experimental or speculative.

Still, the world is moving towards a more fragmented monetary landscape. Countries are diversifying their reserves into gold and other non-dollar assets. At the same time, regional payment systems are proliferating and dollar-denominated lending to emerging economies is declining.

Commodities are also priced increasingly in currencies other than the dollar. And no longer are only countries like China retreating from the dollar system, even US allies in Europe are encouraging banks to reduce their reliance on dollar funding.

The global economy is entering a financial interregnum – a period in which the old order is fading but the new one is not yet born. The dollar’s dominance will not vanish overnight as too many institutions and networks still rely on it. But its uncontested supremacy is coming to an end.

A fragmented financial system will reduce US leverage, while also making the global economy more complex and, possibly, more crisis-prone. The dollar is not dead. But the world is slowly preparing for life beyond dollar hegemony, and the second Trump administration may be the catalyst that turns long-running dissatisfaction into systemic change.

Pharmacists are taking on a greater role in patient care while finding ways to contribute more financially and operationally to their health systems. They need the right technology and support to succeed.

The shifting role of the pharmacist

Pharmacists were once seen as a drug-dispensing function, even within hospital and health system settings. Now, with team members present in nearly every care setting, from hospitals and physician clinics to patients’ homes and virtual environments, it is viewed as an enterprise. This evolution moves pharmacists onto the integrated care team, where they apply their deep knowledge of medication-related functions.

Their unique skill set combines clinical insight, drug administration knowledge, financial acumen, and operational experience, which allows them to not only have impact on care quality and patient outcomes, but on operational efficiency and financial outcomes as well.

Challenging financial dynamics of pharmacy

Integrating pharmacists more deeply into care teams can present financial hurdles, as their value is often demonstrated by preventing adverse events, a metric that is difficult to quantify. However, a systems-focused view reveals their significant impact on both cost savings and revenue growth.

Pharmacy can influence a health system’s total revenue by:

Despite these contributions, reimbursement models often fail to cover the clinical work pharmacists perform. According to Staci A. Hermann, PharmD, MS, FASHP, FACHE, Vice President, Embedded Clinical Decision Support Content at Wolters Kluwer Health, “it does take some creativity to figure out the financial model and show where pharmacies can add value.”

The value pharmacists bring to care outcomes and accessibility

Modern pharmacy teams are frequently focused on helping patients navigate complex care access issues. Some of the ways they contribute to better outcomes and experiences, include:

• Prior authorizations and coverage questions: By navigating coverage gaps and assisting with appeals on patients’ behalf, pharmacists improve patient satisfaction, accelerate access to care, and help solve efficiency issues.
• Assistance programs: Pharmacists help patients discover medication rebate, discount, and assistance programs that, in some cases, are vital to their access to treatment.
• Population health: By tracking at-risk groups of patients or reaching out to those in target groups for preventive care, pharmacists can help improve overall wellness with proactive information and reminders of needed immunizations, testing, and patient education.

Technology to support the modern pharmacist

Workforce shortages and burnout remain significant challenges, with many pharmacists reporting high stress levels and insufficient time for patient-focused tasks. Smart technology is essential for improving operational efficiency and allowing pharmacy staff to focus on higher-value clinical activities.

Evidence-based technology is crucial for streamlining access to drug and clinical intelligence. Unified solutions that provide point-of-care access to trusted, updated information help make professional workflows more efficient:

• UpToDate® Lexidrug™ provides pharmacists with the latest drug knowledge and patient-specific tools to support complex medication decisions directly within their workflow. It helps streamline tasks, enhance outcomes, and provide high-quality patient education.
• Medi-Span® powers meaningful medication alerts, using clinical screening based on the latest evidence to help pharmacists reduce errors, inappropriate dosing, and adverse events. By optimizing notifications, it helps lessen alert fatigue and allows pharmacists to focus on the information that matters most.

By using consistent, evidence-based solutions, care teams can standardize practices, reduce harmful variations, and streamline processes. This alignment is critical as pharmacists continue to expand their role in driving better patient care and access across the healthcare ecosystem.

Learn more in the eBook, “Redefining pharmacy: Contributing to patient care ecosystem-wide.”