Australian Inflation in Check?
In its April meeting, the Reserve Bank of Australia (RBA) kept the cash rate unchanged at its lowest reading since the Global Financial Crisis. The governor of the RBA stated that earlier monetary easing is already “having an expansionary effect on the economy,” but the inflation outlook “would afford scope to ease policy further,” if necessary.
In this context, we examined the latest cyclical movements of ECRI’s Australian Future Inflation Gauge, which is designed to anticipate cyclical turning points in the Australian inflation rate. Interestingly, it already provides important insights about where Australian inflation could be headed in the coming months.