Australia’s Hot Inflation Suggests Higher-for-Longer Rates
- Core inflation at 4% came in faster than economists expected
- Australian dollar gains as traders pared bets on policy easing
Australia’s inflation came in faster than expected in the first three months of 2024, suggesting price pressures are proving stickier and bolstering the case for the central bank to hold interest rates at a 12-year high.
Yields on the policy-sensitive three year government bonds jumped the most since May after the consumer price index advanced 3.6% from a year earlier, exceeding the 3.5% estimate, government data showed Wednesday. A closely watched core inflation gauge — the trimmed mean — rose 4%, also higher than forecast and well above the RBA’s 2-3% target.