Australia, Türkiye See Inflation Drop and Rate Hopes

Australia's inflation rate dropped to 2.1% in May 2025, its lowest in nearly four years, while the trimmed mean fell to 2.4%, keeping both measures within the Reserve Bank of Australia's 2-3% target for several months. The decrease in inflation was driven by falling food, petrol, and housing costs, leading markets to anticipate up to four rate cuts by the RBA before the end of 2025 and causing government bond yields to fall. Treasurer Jim Chalmers acknowledged the progress on inflation but warned of ongoing global economic challenges. In Türkiye, inflation expectations for the next year have also declined, with the Finance Minister attributing this to economic reforms and lower oil prices. Both Australia and Türkiye view falling inflation as supportive of economic recovery and financial stability. Investors are closely watching central bank policy decisions for further direction.