In some respects, we are back to where we were in 2021 when the supply constraints that arose from the COVID lockdowns and widespread illnesses started to reveal themselves in escalating prices around the world. This time it is the US-Israel folly in the Middle East that is the culprit and the supply constraints are largely confined to energy, specifically oil (and its derivative products). And like the COVID inflation, the current inflationary pressures will prove to be transitory and will dissipate as soon as Trump gets bored and decrees his folly is over. It is irresponsible to adjust monetary policy, which will have long-term consequences, to deal with a short-term blip, especially when the causes of that blip are not sensitive to interest rate changes. When the RBA hiked interest rates again they knew they could not justify it based on the energy cost rises. Everyone knows these cost rises are temporary. So the RBA resorted to “capacity constraints” and ‘rising expectations’ to justify their action yet provided no robust evidence to support these assertions. It was ideology triumphing over reason. Just what we have come to expect from our central bank.