Key points:
Inflation is in retreat thanks to improved supply and cooling demand. A further fall is likely this year.
Australian inflation remains relatively high - but this mainly reflects lags rather than a more inflation prone economy.
Profit gouging or wages were not the cause of high inflation.
The main risks relate to the conflict in the Middle East escalating and adding to supply costs; a surprise rebound in economic activity & sticky services inflation; and floods; the port dispute and poor productivity in Australia.
Lower inflation should be positive for investors via lower interest rates, although this benefit may come with a lag.
The world is now a bit more inflation prone so don’t expect a return to near zero interest rates anytime soon.
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