While Australia’s inflation breakout appears to have peaked, the 7 per cent CPI increase in the year to the first quarter of 2023 remains well above the Reserve Bank’s 2 per cent to 3 per cent target that has served Australia so well since the early 1990s and which the official review of the nation’s politically independent central bank last week endorsed. And, while price increases for goods are decelerating as the pandemic-induced supply chain disruptions ease, services inflation continues to accelerate. The central issue is whether the policy settings are tight enough to return inflation to within its target range by the end of 2025 as implied by the Reserve Bank’s projections. And that will require some clear-eyed interpretation of the Reserve Bank’s looming requirement to give “equal consideration” to price stability and full employment in the setting of monetary policy.