it's too early for the RBA to pull the trigger on interest rates
- Written by Richard Holden, Professor of Economics, UNSW
![it's too early for the RBA to pull the trigger on interest rates](https://images.theconversation.com/files/442864/original/file-20220127-16-15mjti5.jpg?ixlib=rb-1.1.0&rect=0%2C519%2C4627%2C2306&q=45&auto=format&w=496&fit=clip)
Inflation is picking up in Australia, and there is considerable speculation about what the central bank will do with interest rates in 2022.
The Consumer Price Index[1] figures out this week show prices over 2021 rose 3.5%[2]. That increase reflected big jumps in some prices – such as transportation costs, up 12.5% – while other prices fell – such as communication (down 0.5%) and clothing & footwear (down 0.3%).
These large differences across categories are why the Australian Bureau of Statistics also reports a less volatile measure of price changes known as the “trimmed mean”. That rose by 2.6% over the past year – in the middle of Reserve Bank of Australia’s target range of 2-3% inflation.
The trimmed mean is what the RBA tends to focus on, and will surely be a key topic at the central bank’s first board meeting for the year, next Tuesday.