Inflation figures give an early guide on interest rate moves

A major economic release is upon us: March quarter inflation.

It seems like an innocuous data point, so why do economists get so excited about it? And why is this March quarter release so important?

Put more crudely, why should you care?

The release of the consumer price index (CPI), which measures inflation, is arguably one of the more important data drops on the economics calendar.

Think of it like the economy’s blood pressure: low inflation suggests lethargy, weakness and vulnerability; high inflation represents hypertension, indicating major underlying problems with an economy that’s fit to burst.

What policymakers and economic lever-pullers, like the Reserve Bank, want is inflation that’s in the middle of those two extremes.