Jarden warns: The Reserve Bank of Australia cannot accelerate disinflation solely through rate hikes; core inflation is expected to remain above 3%.
- Jarden economists point out that the Reserve Bank of Australia cannot accelerate the natural decline of inflation simply by adjusting interest rates.
- The composition of inflation is more important than the level of inflation itself. Core inflation is expected to remain above 3% until the second half of 2027.
- The main reason for inflation vastly exceeding expectations is not an overheated domestic economy, but rather factors related to fuel costs, which are beyond the control of officials or politicians. The situation is expected to ease once the Middle East situation normalizes, but the key lies in how much cost pressures will impact Australia's goods and services.
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