Aussie sharemarket hits four-month low after Reserve Bank warning on inflation

Australia’s sharemarket has slumped to a four-month low after the Reserve Bank of Australia’s surprising admission about the nation’s inflation rate.

The local sharemarket continued its sell-off, dropping a further 112 points or 1.3 per cent to 8,526 on Tuesday morning.

The trading falls follow the RBA releasing the monetary policy minutes that show inflation is likely to remain above 3 per cent into the second half of 2026.

“Headline inflation was expected to be higher than underlying inflation over this time, as earlier electricity rebates end,” the RBA said.

“Both headline and underlying inflation were then forecast to be slightly above the midpoint of the target range in 2027.”

Underlying inflation is the RBA’s preferred measure, as it removes volatile items of the CPI, including