I hear the news, etc and it all looks like inflation is being beaten down by the RBA’s rash moves (my opinion) over the last 12 months. Like, I know our rates were on a super-low “emergency setting” so for sure, they needed to rise off 0.1%. No argument from me on that one. What I did think back then, was that, if it was such an emergency, then a 1% increase right of the bat wouldn’t have been a bad move. Instead, they nibbled away at the Cash Rate for over a year.
So OK, I think that could have been done differently, but, as most would know via the other topic, I have long thought they went TOO far. If they had stopped around 3.1% that would have saved a lot of angst. But, was I right there? Did it REALLY need to get as high as it has?
I’m still thinking “NO”, and here’s why – just yesterday I heard the inflation was down to 4.9%, below expectations of 5.2%, and a good drop below Sept (5.6%). Now, here’s where I am struggling – these are yearly figures (CPI from Oct22 – 23) and, to get a yearly figure down so much in a month, isn’t this indicative of a HUGE drop in the current month?
Is this how it works? Sep22’s figures no longer count (these could’ve been quite high I guess) and Oct23’s are added on. 0.7% difference in a month parlays out to 8.4% in a year – so isn’t the current trend already ENOUGH to do the job the RBA wants done? Can we expect 4.2% for Nov? and 3.5% for Dec? I know, it’s Xmas, but then Dec 22’s figures will drop off (and they could’ve been huge….) I guess World events can impact to stuff it all up though.
Am I out in left field on this? Or has the RBA broken the back of the problem, and all we need is to “hurry up and wait”?
Thoughts?
Benny
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