Table of Contents

• Big-Picture Snapshot
• Foundational Indicators
• Chart Dynamics
• Forward Outlook
• Closing Thoughts

Big-Picture Snapshot

Drivers this month

• Food and non-alcoholic beverages: flat
• Housing: unchanged
• Transport: no change

Policy pulse

Australia's February inflation rate stood at 0.00%, a sharp deceleration from January's 0.40% and well below the Reserve Bank of Australia's 2–3% annual target range[1]. The monthly print aligns with market consensus and signals a pause in price pressures.

Market lens

Australian bond yields barely moved after the release. Traders interpreted the flat reading as a sign of contained inflation risk, reducing bets on near-term policy tightening. The Australian dollar traded sideways, reflecting the absence of inflationary surprises.

Foundational Indicators

Historical context

February's 0.00% reading follows January's 0.40% and December's 1.00%. The 12-month average now stands at 0.20%. Over the past six months, inflation has ranged from 0.00% (January, February) to 1.00% (December), highlighting a clear cooling trend.

Comparative benchmarks

The current level is the lowest since January 2026 and matches the zero growth seen at the start of the year. Compared to the same period last year, the inflation rate has moderated significantly, with the year-over-year change now at its softest since early 2025.

Data source and methodology

Figures are sourced from the Sigmanomics database, which compiles official Australian Bureau of Statistics releases. The MoM inflation rate measures the percentage change in the Consumer Price Index from the previous month.

Chart Dynamics

Forward Outlook

Scenario analysis

• Bullish: If inflation remains at or below 0.10% MoM through Q2, probability 25–35%, the RBA could maintain its current policy stance, supporting risk assets.
• Base: A continuation of 0.00–0.20% prints, probability 50–60%, would reinforce the view that inflation is contained and the economy is stabilizing.
• Bearish: A return to 0.40% or higher, probability 10–20%, would reignite policy tightening risks and weigh on consumer sentiment.

Risks and catalysts

Upside risks include energy price volatility and potential wage pressures. Downside risks stem from weak retail demand and global disinflationary forces.

Closing Thoughts

Australia's February inflation data confirms a decisive cooling trend, with the monthly rate flatlining for the second time this year. The subdued print, combined with muted market reaction, underscores the effectiveness of recent policy measures and the absence of immediate inflationary threats.

FAQ

What is the latest Inflation Rate MoM for Australia?

Australia's latest monthly inflation rate is 0.00% for February 2026, unchanged from January and below the previous month's 0.40%.

How does the February 2026 reading compare to recent trends?

The February print marks the second consecutive month at 0.00%, highlighting a cooling trend from December's 1.00% spike.

What does a flat Inflation Rate MoM mean for markets?

A flat monthly inflation rate signals subdued price pressures, reducing the likelihood of near-term policy tightening and supporting market stability.