A concern for central banks is to keep inflation expectations anchored.
In a nutshell, and I’ve covered this before:
– The argument is that inflation expectations can become self-fulfilling.
As you can see from the headline, at 3.5% inflation expectations in Australia have dipped a little, but not ‘unanchored’ at this stage
Australia – Consumer Inflation Expectations (August): 3.5% (prior 3.7%)
