FX.co ★ Australia’s Inflation Expectations Rise from Over 4-Year Low

Consumer inflation expectations in Australia increased to 4.2% in April 2025, up from March's figure of 3.6% — the lowest recorded in over four years. This recent data highlights the persistent uncertainty regarding both the domestic economic outlook and the inflation path. On a global scale, sentiment is further dampened by recent tariff announcements from the U.S., which have already negatively affected confidence and have the potential to cause broader repercussions should they expand or invite retaliatory actions. Domestically, Australia's monthly Consumer Price Index (CPI) climbed 2.4% year-on-year in February, nearing a four-month peak. Conversely, annual inflation registered at 2.4% in the fourth quarter of 2024, the lowest since the first quarter of 2021. The trimmed mean CPI, an essential measure of underlying inflation, increased by 3.2%, slightly below the anticipated 3.3%, yet remains above the Reserve Bank of Australia's (RBA) target range of 2–3%. During its April meeting, the RBA maintained the cash rate at 4.35% for the tenth consecutive session, aligning with market predictions.