Inflation picks up in April at 3.6pc; above forecast
Joshua Peach\
The number: The monthly headline consumer price index indicator rose 3.6 per cent in annual terms in April from 3.5 per cent the previous month, overshooting analysts’ consensus forecast of a fall to 3.4 per cent.
Why it matters: The Reserve Bank has held the cash rate on hold since November with inflation still above its 2 per cent to 3 per cent target. Economists will be looking at the services component of this month’s data which has proven resilient to higher rates.
What has changed: Traders globally continue to push out rate cut expectations as data continues to show resilience in the labour market and economy. Unlike the rest of the world, money markets in Australia are unsure whether the next rate move is up or down. They imply a 16 per cent chance the RBA will lift the cash rate to 4.6 per cent by September, but are fully priced for a rate cut in August 2025.
What next: The Federal Reserve’s preferred measure of underlying inflation – the core PCE price index – is due on Friday evening (AEST) which could impact expectations in Australia.
