All eyes on inflation for crucial interest rate clues
Key inflation figures could be the final piece of the puzzle on what the Federal Reserve does next on interest rates
Inflation data for the September quarter will be released by the Australian Bureau of Statistics on Wednesday and an increase is likely.
Economists predict headline inflation will rise from 2.1 percent to 3 percent.
The quarterly figures will carry more weight for the Federal Reserve as it considers whether to cut interest rates at its next meeting on Tuesday.
This is the last important economic data to be released before the interest rate decision.
The previous quarterly figures for the shortened average, which is the preferred indicator of the Central Bank due to its elimination of variable price changes, stood at 2.7 percent, the lowest level since December 2021.
AMP chief economist Shane Oliver said Reserve Bank governor Michelle Bullock’s “hawkish comments” meant much would depend on inflation figures for any potential rate cut
He said a 0.6 per cent increase would be in line with the central bank’s forecasts and would mean a rate cut, but a 0.9 per cent increase would likely mean homeowners miss out on mortgage relief.
CommSec chief economist Ryan Felsman said reduced average inflation will likely rise 0.8 percent this quarter, while the annual growth rate will remain steady at 2.7 percent.
The official cash interest rate stands at 3.6 percent, and higher-than-expected unemployment figures for September increase expectations for a rate cut.
But Ms Bullock said on Monday she was relatively unaffected by the rise in unemployment and there were signs the job market was still tight.
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