Last Wednesday’s better-than-expected Consumer Price Index increased the chances of an interest rate cut at the Reserve Bank of Australia’s first meeting for 2025 on February 17-18. The inflation data buoyed the Albanese government’s desperate hope that rates relief will give angry voters tangible proof that cost-of-living pressures are easing ahead of the election due no later than May 17.

A day later, uncertainty about the possible inflationary effects of the second Trump administration’s trade policies prompted the US Federal Reserve to keep interest rates on hold. The Fed’s wait-and-see approach was borne out at the weekend when Donald Trump issued an executive order levying a 25 per cent tariff on imports from Canada and Mexico, plus an additional 10 per cent duty on imports from China.