Inflation expectations still dead in the water

Roy Morgan Research has released its inflation expectations survey for January, which reveals that Australians expected inflation of only 3.6% over the next two years, unchanged on December:

Inflation expectations remained 0.3% below the same time last year (January 2020).

Inflation Expectations are now heavily correlated with age. Older Australians born before 1946 – the so-called ‘Pre-Boomers’ – now have the highest Inflation Expectations at 3.8%, and with the biggest increase of 0.7% points since the mid-2020 record lows.

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.