The break-even 10-year inflation rate has improved in recent months and returned to the (lower-half of the) RBA’s 2-3% target range. Also, the faster than expected fall in the unemployment rate to 5.1% in May and likely labour shortages in various sectors of the economy that will come out of hibernation in 2022 should start to boost wage pressures. Given this, I have put a bit more weight compared to last month on liftoff in April 2024 rather than November 2024. However, the RBA should make clear that liftoff in the first half of 2024 would require inflation to be sustainably in the top half of its 2-3% target range before then to help partially offset the effects of the Covid crisis (and past misses of the target range) on the price level.