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>>Plumb’s emphasis on quarterly CPI data highlights a shift in the RBA’s inflation forecasts and signals an evolution in policy.

Plumb’s emphasis on quarterly CPI data highlights a shift in the RBA’s inflation forecasts and signals an evolution in policy.

crypthub

about 4 hours ago

RBA’s New CPI Emphasis

Assistant Governor Christopher Plumb told parliament that the Reserve Bank will give priority to the quarterly Consumer Price Index when forecasting inflation. The change signals a shift in how price pressures are interpreted for monetary policy into 2025 and beyond. It is expected to shape interest‑rate decisions, business planning and household expectations.

Why Quarterly Data Matters

Quarterly CPI covers about 100,000 prices across eight cities, providing a complete view of goods, services and expenditure weights. Larger sample sizes and thorough seasonal adjustment reduce noise from short‑term spikes that can distort monthly figures. The richer dataset improves identification of persistent trends, especially in services inflation.

Policy and Market Implications

With quarterly CPI as the primary gauge, the RBA will be less reactive to monthly fluctuations and communicate policy more around the February, May, August and November releases. Businesses can align investment and wage decisions with the quarterly cycle, while mortgage holders gain clearer signals on rate moves. The approach mirrors practices of the ECB and Bank of England, enhancing transparency and predictability.