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$AUD closing OIS run
Hikes priced:
May +1bps
Jun +3bps
Aug +3 bps
Sept +2 bps
Nov 0
Cuts priced
Dec -2bps
Feb 25 -8 bps
Mar 25 -14bps
May 25 -32bps.

The RBA forecast profile in Feb assumed 50bps of rate cuts by Dec 24 and 100 by Dec 25. Market pricing.
As it updates it’s forecasts it will be putting in 100bps higher interest rates so will no doubt revise inflation lower in 2025 and 2026

Where were these people when inflation was below target?

I didn't plan to waterboard the CPI but there's so much tosh out there I've engaged Harry Pearce to help.
Using monthly CPI, which detects turning points before the quarterly clodhopper.
Up 1.2% in last 6 mths, 2.3% annualised
Up 0.5% in last 3 mths, 2.0% annualised
Whooshka!

'That's life (that's life)
That's what all the people say
You're riding high in April, shot down in May
But I know I'm gonna change that tune
When I'm back on top, back on top in June'
Frank Sinatra

December qtr CPI: 0.6% vs expected 0.8%
March qtr CPI: 1.0% vs expected 0.8%

Have a cup of tea & a lie down folks...

I am so glad the inflation target of the RBA was not lowered as some folk were suggesting a few years ago

Interesting.

To keep everyone confused about the 'housing crisis' - largest drop (2019 to 2024) in ABS CPI weights (share of the CPI basket) was rents (down from 7.1% to 6.03% of expenditure) abs.gov.au/statistics/eco…

For the excitable precious puppies out there:
Annual inflation, quarterly data:

Dec 22 7.8%
Mar 23 7.0%
Jun 23 6.0%
Sep 23 5.4%
Dec 23 4.1%
Mar 24 3.6% - today's result

Call me crazy, but my maths suggests that is a deceleration in inflation.
ICYMI

March qtr CPI 1.0%, annual rate easing to 3.6%. Inflation peaked at 7.8%.
Few implications for RBA - still on track to see inflation hit 2-3% target in 2024.
RBA happy but wont adjust rates at 7 May meeting even with weak growth & risk of faltering labour mkt.
My Two Minute Take

There’s lots of good policy choices Australia should make

But we rarely do, mostly because one side or the other of politics has successfully demonised it

One reform I’ve championed just happened in the US

Let's do it here too - it's smart and simple

ftc.gov/news-events/ne…

23 April 1915. Rupert Brooke (aged 27), died of an infected mosquito bite, en route to Gallipoli. One of his best poems of WW1 was, The Soldier. He was also known for his good looks, prompting the Irish poet W. B. Yeats to describe him as “the handsomest young man in England”.

A couple of business contacts summarising the current business climate in the last few days:
'fucked'
'worst ever'
Small sample of course but they have a sound record with me as a guide on part of the economy.
ICYMI

Another miserable consumer confidence result - consistent with miserable retail spending

Emmo is correct ...

A further sign of a cooling labour market.

Huh?
Am hearing some commentators referring to the Australian economy as 'resilient', 'growing solidly' with a positive outlook.
The cold, hard facts are grim making the budget a challenging one for Treasurer Chalmers & has the door wide open for RBA rate cuts
My Two Minute Take

Overnight:
Stocks up a bit; bond yields basically flat; AUD up a smidgen.
No serious local news today - a few business surveys.
Tomorrow the inflation data for March and the March qtr.
With confirm the chronically weak economy is seeing inflation cascade towards the target