Australia's CPI: Modest Signs of Second Round Flow Through

Australia's April headline CPI rose 0.4% m/m, lower than expected, while trimmed mean inflation matched expectations at 0.3% m/m. ANZ expects the RBA to maintain the cash rate at 4.35% as cost pass-through remains modest.

Key Takeaways

• 1.April's trimmed mean inflation rose 0.3% m/m, aligning with expectations, while headline inflation was softer than expected at 0.4% m/m.
• 2.There are only modest signs of higher input costs flowing through to the broader inflation basket, as shown by a decline in the diffusion index.
• 3.ANZ maintains its forecast that the Reserve Bank of Australia (RBA) will keep interest rates on hold at 4.35%.

Table of Contents

• Australia's CPI: modest signs of second round flow through
• Charts
• Important Notice

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