It looks as though the Reserve Bank of Australia (RBA) is at it again. By now you should be familiar with them deciding that fuel and food can be discounted from the CPI rate due to the volatility of those items – and the fact that they have been among the largest risers – but now they have thrown another item into the mix.
Yesterday the RBA released the minutes from its August 5th meeting – too late for us to deliver it to you in yesterday’s Money Morning – leaving the market with the unequivocal impression that interest rates would be cut at the September meeting.
The minutes told us that “the high quarterly outcome of 1.5 per cent had lifted the year-ended inflation rate to 4.5 per cent. A significant contribution to the CPI had come from the financial services component, which accounted for around 8 per cent of the CPI.”
