Inflation talk around the web...And that question of quarterly numbers

The RBA 'officially' likes to use the last six months of inflation data to provide the bottom-line for Australia's inflation pulse. On that basis, the core pulse is around 3.5% pa (ie, about 40 per cent higher than the RBA's target). Unofficially, I am told that they also like to focus on the annualised quarterly rate of inflation, which makes sense. Using this benchmark, underlying inflation is also running at 3.6% pa. That is, same story. As Glenn Stevens has recently argued, inflation is the most accurate measure the ABS produces, and includes over 100,000 prices. Around the web we have Greg Jericho (aka Grogs Gamut) with a nice note on inflation from a non-technical perspective. We also have Professor Sinclair Davidson throwing his views into the pot, and assigning far too much weight to market pricing of probabilities, which, as I have explained before, are severely distorted by underlying central bank demand for buying Australian dollars (and hence our government bonds), which in turn impacts futures prices and the yield curve.