AMP Deputy Chief Economist Diana Mousina says the RBA should be “more or less on track” to cut interest rates by June after it was revealed the annual inflation dropped to 4.1 per cent in the December quarter.
“We were expecting a lower inflation print than the market,” she told Sky News Business Editor Ross Greenwood.
“But even I was surprised by the weakness in that headline number.
“And also on the monthly CPI, I think the monthly CPI can tell us a bit more at the moment because it shows a bit more of the current trend for the month, which is a good forward-looking indicator for inflation later this year.
“In our view, we think inflation’s actually going to be below the three per cent target band by the time we reach the end of this year.”
