The ABS released the quarterly CPI yesterday.
It surprised me and just about everyone else on the upside.
The good news is rate rises have very sharply cut the prices on goods and anything influenced by the tradable sector.
The bad news is prices in the services sector and non-tradable sector appears to be gaining strength again.
Hence the more competition you have anywhere the more inflations drops and vica versa.
The other thing we have to be wary of is the number released yesterday could be an outlier. It has occurred previously . Just ask Glenn Stevens he got two of them.
The RBA has to examine the monthly CPI and other price series in surveys. ( Just one thing Institutional economics said the budget gave the ABS enough money so the monthly CPI would be the same as the quarterly CPI just like almost every other Western country. This was obviously wrong unfortunately.) If that information shows inflation is dropping then they will cut. My guess is they will wait until the quarterly CPI shows this.
If this happens then rate cuts will not occur until late this year at the earliest.
Here is something from the Guardian on this.
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