Even excluding the cost-of-living rebates, inflation is falling

Inflation fell to 2.8%, the slowest pace in more than three years taking inflation well into the RBA’s inflation target band, which is 2 to 3 percent. More importantly the RBA was forecasting inflation to be a 3 percent at the end of 2024 and we are well below that. As such, with supply-side concerns easing, that is a labour market softening and unemployment drifting higher, wage increase are likely to be less than what the RBA expected, meaning rate cuts from February still seems the most likely path.