RBA to Prioritise Quarterly CPI for Inflation Forecasting, Signalling More Stable Rate Guidance
Reserve Bank of Australia Assistant Governor Christopher Plumb said the RBA will place primary weight on quarterly Consumer Price Index (CPI) releases for inflation forecasting. The shift emphasizes the comprehensive quarterly CPI—covering ~100,000 prices across eight capital cities and updated expenditure weights—over the partial monthly indicator introduced by the ABS in 2022. Plumb argued quarterly data offers better seasonal adjustment, fuller services coverage, and reduced noise from temporary spikes, improving forecasts out 6–8 quarters. The RBA will still monitor monthly indicators and may act between quarters if warranted, but policymakers expect interest-rate decisions, market communications and business planning to reference quarterly trends more prominently. The change aligns Australia with other major central banks that prioritise comprehensive data for core forecasting. Traders and markets can expect lower volatility around monthly releases and clearer policy signals tied to CPI releases in February, May, August and November, though genuine shocks could prompt off-cycle responses.
Neutral
The RBA’s stated shift to prioritise quarterly CPI improves signal quality for inflation forecasts and should reduce short-term market noise around monthly releases. For crypto markets this is largely neutral: clearer and more predictable monetary guidance tends to lower surprise-driven volatility, which can dampen short-lived speculative moves but does not directly tighten or loosen policy immediately. The RBA also preserved discretion to act between releases, maintaining tail-risk for markets. Historically, central bank moves that clarify data preferences (e.g., ECB or BoE communication tweaks) have reduced intraday volatility around data prints while leaving longer-term trends driven by global liquidity, US Fed policy and risk sentiment intact. Short-term: expect reduced spikes in volatility on Australian monthly CPI days and clearer reaction windows at quarterly releases. Long-term: improved predictability may support steadier risk sentiment in AUD and regional markets; crypto correlations to macro trends mean gradual effects rather than a directional catalyst for crypto prices.