Higher for longer
The Reserve Bank published a speech today which took a look at inflation outcomes.
Headline inflation has fallen roughly as had been expected a year ago from around 8 per cent to just under 5½ per cent.
Core inflation has been a bit slower to fall than expected, but is essentially following a similar enough trajectory.
It was noted that services inflation has been slow to come down in some other developed economies.
The RBA therefore sees inflation falling to just under 3 per cent by the end of 2025, with inflation coming down a little slower than previously thought.
Growth in the Aussie economy is expected to be fairly sluggish overall, but will be held up by record immigration, the return of international students, and a huge pipeline of infrastructure and public works to be carried out.
Overall, this aligns with market pricing, which sees interest rates in Australia staying higher for longer than previously believed, before eventually falling in 2025.
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