RBA preview: Status quo but back to a hawkish stance
Inflation is not only sticky in the US but also in Australia and with a very same flavor: prices of tradable goods are disinflating but not those of services. While prices of tradables decelerated sharply to +0.9% YoY in Q1-24, the decline in the headline CPI was limited to +3.6% YoY, which is still above the Reserve Bank of Australia (RBA)’s 2-3% inflation target range (Chart 1). The main reason is that non-tradables (mainly services), which are largely influenced by domestic factors, remained elevated at +5.0% YoY. In fact, rents sharply rose by +7.8% YoY, the highest increase since 2009, as...