The Australian Bureau of Statistics (ABS) has released the all-important Q1 2025 CPI inflation print.
Headline inflation rose by 0.9% over the quarter and by 2.4% year over year. The result was slightly ahead of analysts’ expectations of a 2.4% annual increase.
The more policy-important trimmed mean inflation printed at 0.7% in Q1 2025, in line with analysts’ expectations.
Annual trimmed mean inflation fell to 2.9% to be within the Reserve Bank of Australia’s (RBA) inflation target of 2% to 3%.
The result was also right on the RBA’s quarterly forecast (to 1 decimal point).
Given global uncertainties, the result has effectively greenlit the RBA to cut the official cash rate by 0.25% at its 20 May meeting.
For what it is worth, at the close of business on 29 April, the interest rate futures market was pricing a further three to four rate cuts this calendar year.
