Searing new year Aussie inflation. RBA to follow?

The Melbourne Institute monthly inflation gauge for January is off the hook:

• January monthly Melbourne Institute Inflation comes in at 0.9% month on month, December was 0.2%
• Trimmed mean an insane 0.9% month on month and 5.9% over the year and soon rise furthe.

That is, Trimmed Mean, the breadth of inflation, is a barmy 9% annualised in January.

When one takes a moment to consider that if inflation is loose in the uber-concentrated Aussie economy, then it makes perfect sense.

In trend terms, the gauge has a good trend record of pacing CPI, if being unreliable month-to-month (after all, it was created by the Kook). Goldman:

The Melbourne Institute’s more timely inflation gauge has been volatile over recent months but also continues to point to elevated inflation. Our seasonally-adjusted estimate of the headline measure decelerated to +0.2%mom in December but re-accelerated to +0.8%mom in January. Likewise, the Institute’s 10% trimmed-mean measure eased to +0.4%mom in December but rebounded +0.7%mom in January ( Exhibit 1):

Inflation expectations plateauing:

So, this could match the crazed official December CPI, or presage worse.

The intuitive conclusion is that the RBA is behind the curve but inflation is going to crash before very long.

Hello conundrum.