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>>Australia’s CPI Shows Persistent Inflation, Pressuring the RBA to Keep a Hawkish Policy.

Australia’s CPI Shows Persistent Inflation, Pressuring the RBA to Keep a Hawkish Policy.

crypthub

about 7 hours ago

Stubborn Inflation Signals

The December‑quarter CPI recorded 4.2% annual inflation, far above the RBA’s 2‑3% target. The trimmed‑mean measure stayed elevated at 3.8% and the quarterly rise of 1.2% exceeded forecasts. Core drivers are services, with housing up 7.8%, education 6.2%, insurance 8.1% and food prices still rising 4.5% year‑over‑year.

RBA’s Hawkish Outlook

Governor Bullock cautions against premature easing as price pressures remain entrenched. Markets now expect no rate cuts until late 2025, and some analysts entertain additional tightening if inflation proves persistent. The “last mile” of disinflation is slowed by a tight labour market and stagnant productivity.

Structural Challenges Ahead

Housing shortages, an ageing population and climate‑related supply shocks keep services inflation high. Many households hold fixed‑rate mortgages, delaying the full effect of rate hikes until they reset in 2025. Coordinated fiscal restraint and productivity improvements are viewed as essential to return inflation to target.