Meh, from Westpac:
Market inflation expectations have trended higher over the past two years. However, this has been as much about the pricing-out of deflation risk as it has been the inflation outcomes themselves. It has only really been in the past six months that inflation has shown a sustained lift to target. This occurred after the labour market reached (and exceeded) ‘full employment’ in early 2017.
The January CPI report therefore comes at a pivotal time, with market participants seeking to discern whether inflation will remain contained at or near target, or breakout above.
