Australian Inflation, RBA Rate Hikes & Recession Risk

As expected according to the latest monthly inflation data from the ABS released today, Australian inflation remained elevated in February which underscored persistent price pressures in the economy even before the Iran war disrupted Middle East energy supplies and sent the cost of gasoline and other goods soaring. So at one level we should look through this news, but it does confirm Australia has an inflation problem. And of course Australian gasoline prices are up close to 30%, with supplies short in some areas. Sky reported 500 service stations in NSW and VIC were out of stock. Governor Michele Bullock made clear this week’s rate rise was all about domestic inflation pressures, compounded by the future risk of inflation expectations jumping in response to higher fuel prices.