Inflation’s 4% Jolt Puts the RBA’s Next Move Back in Play

Australia’s CPI rose from 3.5% in July to 4% in August, but the reported culprits include higher petrol and housing costs—not just a surge in household demand. That leaves a cautious upside: if the inflation bump is being driven partly by fuel prices, it may not be proof that the whole economy is running too hot. The distinction matters for how long borrowers have to brace for tighter policy.

The Bear Case

The RBA’s latest rate rise landed just a day before the new...