1 00:00:00,080 --> 00:00:02,480 Speaker 1: So CPI day today, good old inflation. The whole plan 2 00:00:02,600 --> 00:00:03,760 Speaker 1: was to get it back in the band of one 3 00:00:03,760 --> 00:00:06,040 Speaker 1: to three percent. That would mean, in theory, the Reserve 4 00:00:06,080 --> 00:00:08,160 Speaker 1: Bank could continue on its merry way, cutting the cash 5 00:00:08,200 --> 00:00:09,799 Speaker 1: rate and freeing up the economy a bit. So what 6 00:00:09,840 --> 00:00:12,080 Speaker 1: to expect and its chief economist Sharon's on the back 7 00:00:12,119 --> 00:00:15,000 Speaker 1: with the Sharon, good morning, Good morning, mat What you 8 00:00:15,120 --> 00:00:16,440 Speaker 1: got for as numbers wise. 9 00:00:17,079 --> 00:00:19,480 Speaker 2: Well, actually, most of the domestic analysts are in a 10 00:00:19,520 --> 00:00:22,680 Speaker 2: pretty tight band actually, all agreeing that inflation will be 11 00:00:22,760 --> 00:00:25,040 Speaker 2: around the two point two to two point three percent 12 00:00:25,160 --> 00:00:27,400 Speaker 2: year on your mark. That's the same as the Reserve 13 00:00:27,440 --> 00:00:32,640 Speaker 2: Bank actually, so there's pretty widespread the expectation that inflation 14 00:00:32,720 --> 00:00:34,000 Speaker 2: is going to be not just within the band, but 15 00:00:34,159 --> 00:00:34,720 Speaker 2: well within it. 16 00:00:35,400 --> 00:00:39,480 Speaker 1: Job done in the job done or not well. 17 00:00:39,680 --> 00:00:42,800 Speaker 2: So details aren't quite as friendly as the headline. Basically 18 00:00:42,840 --> 00:00:46,280 Speaker 2: if you look at the non tradeable domestic part of inflation, 19 00:00:46,440 --> 00:00:49,519 Speaker 2: but that reflects wage growth and whether the economy has 20 00:00:49,560 --> 00:00:52,159 Speaker 2: been overheated or not. That sort of inflation still expected 21 00:00:52,200 --> 00:00:55,440 Speaker 2: to be north of five percent and actually barely lower 22 00:00:55,480 --> 00:00:57,960 Speaker 2: than last quarter, So still a way to go in 23 00:00:58,040 --> 00:01:00,880 Speaker 2: terms of the sustainability of it all. Rather the fall 24 00:01:01,080 --> 00:01:03,320 Speaker 2: in inflation sort of ninety percent of it over the 25 00:01:03,360 --> 00:01:06,480 Speaker 2: last YEARNIT that has been driven by tradables inflation, and 26 00:01:06,480 --> 00:01:09,960 Speaker 2: that's actually expected to become a negative minus one point 27 00:01:10,040 --> 00:01:13,040 Speaker 2: six percent here on the Earth. That's mostly import prices, 28 00:01:13,400 --> 00:01:14,760 Speaker 2: so there was a bank can take a bit of 29 00:01:14,800 --> 00:01:18,080 Speaker 2: credit for that, and so far as terms than keeping 30 00:01:18,120 --> 00:01:21,280 Speaker 2: their prices sharp because consumption is weak because rates are high. 31 00:01:21,319 --> 00:01:23,480 Speaker 2: But some of it's a lot water those to do 32 00:01:23,560 --> 00:01:24,800 Speaker 2: with things like oil prices. 33 00:01:25,400 --> 00:01:27,400 Speaker 1: Bank of it, Well, no, do we want that sort 34 00:01:27,400 --> 00:01:29,160 Speaker 1: of balance of what you say is correct because a 35 00:01:29,160 --> 00:01:31,959 Speaker 1: lot of the non tradable stuff there's councils, insurance, things 36 00:01:32,000 --> 00:01:34,800 Speaker 1: like that, and I don't know that that's necessarily getting 37 00:01:35,440 --> 00:01:37,600 Speaker 1: attended to it. And if that's going to be the case, 38 00:01:37,640 --> 00:01:39,279 Speaker 1: aren't we still in an element of trouble? 39 00:01:40,360 --> 00:01:43,280 Speaker 2: Yeah, the council rates are expected to be up thirteen 40 00:01:43,319 --> 00:01:45,280 Speaker 2: percent in the quarter. That would actually be the highest 41 00:01:45,360 --> 00:01:49,240 Speaker 2: quarterly increase in rates since late nineteen eighty seven. So 42 00:01:49,520 --> 00:01:52,800 Speaker 2: some of that is related to past time inflation and 43 00:01:52,880 --> 00:01:55,720 Speaker 2: the economy, things like construction costs and waged costs that 44 00:01:55,960 --> 00:01:58,800 Speaker 2: you know, there's obviously a lag when it comes to 45 00:01:58,840 --> 00:02:02,400 Speaker 2: things like rate, but some of it stuff that Evan 46 00:02:02,560 --> 00:02:06,880 Speaker 2: really can't do much about at all. Infrastructure needs, that 47 00:02:06,920 --> 00:02:09,640 Speaker 2: sort of thing, but they can reasonably expect that that 48 00:02:09,840 --> 00:02:12,239 Speaker 2: sort of thing plus insurance costs would be another one 49 00:02:12,400 --> 00:02:16,320 Speaker 2: that those will reduce. Well, not prices weren't fall, but 50 00:02:16,360 --> 00:02:18,720 Speaker 2: the inflation rate will fall over time, So as long 51 00:02:18,760 --> 00:02:22,119 Speaker 2: as the core inflation's falling, then I think they think 52 00:02:22,120 --> 00:02:25,160 Speaker 2: they can be pretty relaxed about that, probably more relaxed 53 00:02:25,160 --> 00:02:28,560 Speaker 2: than rate payers about those high increases because they will 54 00:02:29,120 --> 00:02:32,720 Speaker 2: they're not going to stop inflation from being in targeted 55 00:02:32,720 --> 00:02:33,480 Speaker 2: over nineteen. 56 00:02:33,680 --> 00:02:37,840 Speaker 1: Okay, so fifty or seventy five in November, we're picking. 57 00:02:37,560 --> 00:02:41,000 Speaker 2: Fifty most everybody is, but obviously this is a really 58 00:02:41,040 --> 00:02:45,080 Speaker 2: important checkpoint on that front. We've also got labor market 59 00:02:45,160 --> 00:02:49,560 Speaker 2: data just three weeks before that decision, so the market's 60 00:02:49,600 --> 00:02:52,720 Speaker 2: weighing up whether it'll be fifty or seventy five. They're 61 00:02:52,720 --> 00:02:55,239 Speaker 2: pricing in a little bit more than fifty, but a 62 00:02:55,320 --> 00:02:57,760 Speaker 2: seventy five point cut that does have more than a 63 00:02:57,760 --> 00:03:01,799 Speaker 2: whiff of emergency a data state that I think it'll 64 00:03:01,840 --> 00:03:04,920 Speaker 2: come down to whether they think, why do we need 65 00:03:04,960 --> 00:03:08,440 Speaker 2: to cut seventy five or why not cut seventy five, 66 00:03:09,120 --> 00:03:11,240 Speaker 2: and the outlook for inflation will have a lot to 67 00:03:11,320 --> 00:03:13,799 Speaker 2: do with that because the ocr the official cash rates 68 00:03:13,840 --> 00:03:19,600 Speaker 2: still clearly at contractionary levels. But yeah, I think sidneyfied 69 00:03:19,600 --> 00:03:23,000 Speaker 2: would be a pretty big deal. It's not something you 70 00:03:23,040 --> 00:03:25,520 Speaker 2: see very often. So of course we did see sidneyfied 71 00:03:25,560 --> 00:03:27,840 Speaker 2: those point hips on the way up, and we do 72 00:03:27,960 --> 00:03:30,519 Speaker 2: also have a twelve week gap between them and in 73 00:03:30,639 --> 00:03:32,720 Speaker 2: the meeting and for everyone, so you could actually argue 74 00:03:32,720 --> 00:03:34,400 Speaker 2: in that regard that a fifty point cut would they 75 00:03:34,400 --> 00:03:35,520 Speaker 2: are slowing down and the. 76 00:03:35,480 --> 00:03:38,120 Speaker 1: Pace of easy exactly. It's interesting, all right, Shairon. Appreciate 77 00:03:38,160 --> 00:03:40,880 Speaker 1: your expertise as almost Sharon's on and it's the chief economists. 78 00:03:40,880 --> 00:03:42,800 Speaker 1: When I say interesting, I mean it's broadly interesting. I'd 79 00:03:42,880 --> 00:03:45,360 Speaker 1: rather not be in the middle of it, run by idiots, 80 00:03:45,400 --> 00:03:48,160 Speaker 1: But you know, here we are. For more from the 81 00:03:48,240 --> 00:03:51,320 Speaker 1: Mic Asking Breakfast, listen live to news talks there'd be 82 00:03:51,440 --> 00:03:55,080 Speaker 1: from six a m. Weekdays, or follow the podcast on iHeartRadio.