Nassim Khadem

And I'm ABC business reporter Nassim Khadem.

I hope so, but I always love doing podcasts with you, Dan.

So the headline rate rose 4.2%.

Now that's down from 4.6%.

And then the trim mean, which is the preferred measure of inflation, that rose slightly.

It was up 3.4%, up from 3.3%.

So that's still well above the RBA's target band of 2% to 3% that they prefer.

I mean, as you just said, Jan, it's above the RBA's target band, but it is slowing.

It's showing an easing in inflation pressures.

And together with the recent lift in unemployment, which you and I spoke about last week, this suggests that higher interest rates may actually be starting to slow demand.

It's more likely that the RBA will hold now next month and wait to see whether the three rate hikes that it's done this year cools inflation over time.

So...

Where inflation and rates then goes, of course, depends on where, you know, whether energy prices fall back, whether global supply disruptions continue, all that sort of stuff.

Yeah, I mean, there's no doubt that rate rises do work to reduce inflation, right?

People just don't have as much money to spend.

But we've also had a war going on and that war has brought in inflation shocks.

And so if that war continues, that could keep inflation elevated.

And, you know, we've talked about this before, Dan, the risk of stagflation where you have slowing growth but at the same time rising inflation.

Now, that's a very dangerous situation to be in and that risk hasn't evaporated just yet.

Precisely.