The quarterly CPI was released yesterday and it came in at 4.1% at an annual rate. Well below the RBA's forecast of 4.5%. The monthly CPI is now in the 3s and is in the 2s on an annualised basis.
I was one of the optimists on the CPI dropping more quickly than most thought so i am glad to be proved right. Too many people ,including the RBA, conflated a supply side shock with excess demand.
I think I can say with confidence rates will drop this year perhaps early in the financial year if the quarterly CPI continues to show inflation dropping.
the RBA must be worried they went too far in raising rates more so because of the government modest contractionary fiscal policy.
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