PHOTO: Diana Mousina, AMP’s Deputy Chief Economist. THE INSIDE INVESTOR

According to Diana Mousina, AMP’s Deputy Chief Economist, the RBA appears to be on course to implement interest rate cuts by June, given the recent revelation of a 4.1% drop in annual inflation during the December quarter.

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In an interview with Sky News Business Editor Ross Greenwood, Mousina expressed surprise at the weakness evident in the headline number, emphasizing that the monthly Consumer Price Index (CPI) provides valuable insights into the current trend. She believes the monthly CPI serves as a forward-looking indicator for inflation in the upcoming months.

Mousina stated that, contrary to market expectations, the inflation print was even lower than anticipated. Additionally, she noted that the monthly CPI suggests a current trend that may influence inflation later in the year. In AMP’s perspective, they predict that inflation will fall below the three percent target band by the end of the year.