Australia's first-quarter CPI rises well above market expectations

Australia's consumer price index (CPI) in the first quarter rose by 2.1% quarter-to-quarter and 5.1% year-on-year respectively, much higher than market expectations of 1.7% and 4.6% respectively, and annual inflation hit a near 21-year high. During the period, the core annual inflation rate rose by 3.7%, the highest level in nearly 13 years, and far higher than the 2% - 3% target range set by the RBA. The RBA has repeatedly predicted that the local core inflation may not be able to reach 2023. Returning to the 2.5% level, as an escort to maintain the accommodative policy, it is now clear that everything has exceeded the central bank's expectations. Given that inflation has exceeded the target, the market expects more first-quarter economic data to be released next month, and the RBA will start an interest rate hike cycle as soon as June after the Australian federal election on May 21.