Treasurer Jim Chalmers last night stuck his neck out on Seven’s Spotlight program telling us that core inflation will go under 3% in December, which should be the trigger for the Reserve Bank to start cutting interest rates.

However, there’s a big problem for those wanting cuts to start in December. The problem is that the ABS doesn’t release any inflation figures after November 27 this year! That announcement will be connected to the October inflation reading!

In fact, we don’t get the November figure until January 8 next year. And the all-important December number, when the Treasurer thinks we’ll see core or underlying inflation under 3%, shows up on January 29!

That means, if Chalmers’ forecasts are right, the RBA should be able to take this result into the February 18 decision day on rates, and that’s when the first rate cut should come. However, the Treasurer and his Treasury boffins will have to be right!

Could it come earlier?

The next meeting is on November 5, which is Melbourne Cup Day. We get to see the September quarter inflation reading on October 30. If the number for core inflation surprises us and is under 3%, the RBA should cut just before the Cup race caller screams: “Go they’re racing in the 2024 Melbourne Cup!”

After that date, the central bank will see the September quarter economic growth numbers in the National Accounts (these are this country’s financial accounts) on December 4. If these numbers say our growth went negative in the three months to September, the RBA could cut on December 10, but core inflation would have to be at least hovering around 3%.

If I was forced to bet (as most of us are on Cup Day), I’d rule out a cut then, unless that October 30 CPI number delivers a surprise core inflation under 3%. On the other hand, if the economic growth number is negative, December 10 could see the RBA cutting.

The economics team at the CBA is still sticking to their guns, arguing inflation is falling faster than the RBA thinks. On this basis, a December cut is possible.

On that subject, following the release of the jobs report (when a big 64,100 jobs were created against an economists’ consensus call of 25,000), money markets pared the chance for a first monetary policy easing in December to 30% from 46% before the data.

Traders are now pricing in a 75% chance of a rate cut in February 2025. If it doesn’t show then, Treasurer Chalmers, who has been off the booze for four years, could easily be driven to drink. He and his ministerial colleagues need a few rate cuts before the expected May election, if only for political purposes.

The rest of us want them for our personal economic circumstances!