Australia’s headline consumer price index came in at 4.0% year-over-year for May 2026, a slight dip from the 4.2% reading in April. That sounds like progress until you look under the hood.
The Reserve Bank of Australia’s preferred measure of underlying price pressures, the trimmed-mean gauge, actually moved in the wrong direction. It rose to 3.6% from 3.4% the month prior, sitting firmly above the central bank’s 2-3% target band.
The numbers behind the hawkish hold
The Australian Bureau of Statistics released its monthly CPI indicator on June 24, and the details paint a picture of an economy where inflation is proving stubbornly persistent.
At 3.6%, core inflation is now 60 basis points above the top end of the RBA’s target range. The RBA has already hiked the cash rate three consecutive times in 2026, pushing it to 4.35%.
