Australian Inflation Forecasts Remain Stubbornly High

Australia's big four banks have forecasted that underlying inflation will remain high in the June quarter, according to recent reports. Economists at CBA, NAB, Westpac, and ANZ expect trimmed mean inflation to rise by 0.9% over the quarter, pushing annual core inflation to 3.7%, above the RBA's target band of 2-3%. Quarterly headline inflation is forecasted to ease slightly to 0.7%, from 1.4% in the previous quarter.

The Reserve Bank of Australia (RBA) is likely to remain cautious about easing policy due to these forecasts, which are based on the upcoming release of Consumer Price Index data by the ABS on Wednesday. If realized, this would reinforce expectations that the RBA will maintain its current stance.