Inflation down but may not be enough for RBA just yet

Assuming core inflation continues to fall over the coming months, we believe that the RBA will be in a position to cut rates in May, with April a possibility, writes KPMG Australia Chief Economist Brendan Rynne.

January's release of inflation data – both headline and core rate – are lower than the market anticipated. Whether the Reserve Bank of Australia (RBA) Board cuts rates in February is touch and go, but we expect the Bank will err on the side of caution and leave rates unchanged, particularly as the new monetary policy board will be not be in place until the following meeting (March 31-April 1). The cost-of-living relief packages have distorted the headline inflation measure to a ...

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Authors: Brendan Rynne

Published Date: 30 January 2025