In my previous bulletin, I said the optimism was possibly overblown. By the end of 2023, many pundits proclaimed that inflation had been tamed. Stock markets staged a remarkable comeback. However, in the last few weeks, that balloon of optimism has been punctured well and truly.

Firstly, here are the latest statistics:

And here is the Australian GDP growth rate chart:

Remember that money supply growth in excess of GDP growth must lead to inflation. It is clear that those conditions have persisted for over two years now. Is it any surprise that inflation persists?

The Australian central bank will announce its monetary policy stance later today. Will it hold or tighten? Predictions in the comments before 2pm Australian eastern time welcome.

Update: RBA decision announced: no change in the target cash interest rate.