Wednesday, 27 January 2010

What inflationary pressures?

The markets moved again this morning in the belief that the newly released December consumer price figures from the Australian Bureau of Statistics make another rise in official interest rates more likely. Just why that was the reaction is unclear to me because the figures themselves provide no evidence that inflationary pressures are rising. On the contrary, all the measures that the Reserve Bank looks at are pointing downwards.
No matter by which measure, inflation has been going down.
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