Inflation falls but not fast enough for RBA to rush to cut rates

The headline CPI for the March quarter fell to 3.6% y/y (from 4.1% in the December quarter). While this is certainly a move in the right direction as far as the RBA are concerned, the fact that the Core measure (which excludes volatile elements within the CPI) is still at 4.0% y/y will mean that the Bank will not be in any hurry to cut rates just yet.

In the chart below the monthly CPI readings show quite clearly that the pace of change has slowed.

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