Australia Q1 Inflation Holds Steady at 2.4% Amid Market Expectations

Australia's annual inflation rate remained steady at 2.4% in the first quarter of 2025, unchanged from the previous quarter and slightly above market expectations. This marks the lowest inflation level since 2021, with headline inflation declining for seven of the past nine quarters. Services inflation eased to its softest rate since mid-2022, but this was partially offset by a rebound in goods inflation, especially due to rising electricity prices after expanded energy rebates. Core inflation, as measured by the trimmed mean, fell back into the Reserve Bank of Australia's 2-3% target band for the first time in several years, strengthening the case for a potential rate cut at the RBA's upcoming policy meeting. Market expectations have turned more dovish, with investors anticipating a reduction in interest rates by year-end amid concerns about global economic growth. The steady inflation figures come as Australia approaches a federal election, adding further significance to the RBA's forthcoming decision.