Cognisant Of Risks Surrounding Inflation Psychology

The minutes from the RBA's May meeting also noted that "inflation was now above the target and was not forecast to return to the target range until mid-to-late 2024. While the significant rise in inflation had been largely the result of global factors, which were likely to have a more temporary effect on inflation, the flow of information on inflation and wages over the preceding month had been consistent with more persistent inflationary pressures arising from limited spare capacity in the domestic economy. Members observed that it would be more difficult to return inflation to the target if the inflation psychology in Australia were to shift in an enduring way."