Australian CPI data & the RBA cash rate - "no option but to increase" the forecast

ING on today's inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term data and imp[lications for the Reserve Bank of Australia.

In brief:

• Much of the recent inflation disappointment can be put down to one-offs, weather-related and other seasonal effects. But that still leaves inflation higher, and likely to come down slower than otherwise
• But while we had harboured hopes that base effects would start to quickly bring down inflation, enabling the RBA to stop hiking once rates reached 3.6%, which they would have done by the March meeting, we now believe they will have to keep hiking for at least another 2 meetings, taking the peak cash rate up another 50bp to 4.1%.

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Earlier posts:

Australia Q4 Headline CPI 1.9% q/q (expected 1.6%)

AUD/USD jumps on the higher than expected Australian CPI report

There was a second CPI data point from Australia, came in at a rocketing 8.1% (from 7.3%)

The RBA website has outdated data on it, big time!

ANZ says Australian CPI data 'cementing' in 25bp rate hike at the RBA February 7 meeting

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AUD/USD had risen to highs over 0.7100: