Inflation

Sometime this week US President Trump is set to unveil reciprocal tariffs “that match the duties imposed by other countries”. Australia has very few tariffs left these days and has had a trade agreement with the US since 2005, so presumably won’t be targeted (the agricultural exemptions were inserted to protect US farmers, not Australian).

The December quarter CPI inflation data were softer than expected.

Strong labour force data in December have all but ruled out a February rate cut.

Inflation cooled in November, with implications for interest rates.

As Australia grapples with its post-pandemic recovery, the principal macro challenge remains inflation.