Australia’s central bank warned that monthly inflation data is too volatile to interpret in isolation, with RBA Assistant Governor Sarah Hunter stressing that policymakers will “not be jumping at one month of data” as they assess whether the current 3.6% cash rate is sufficiently restrictive to steer inflation back to target.Speaking in Sydney, Hunter said the Bank is re-examining three structural questions that could significantly shape the policy outlook: whether firms have changed how they set prices in the post-COVID environment; how best to measure the economy’s supply capacity — particularly the degree of labour-market tightness; and whether monetary-policy transmission channels have shifted, given the stronger-than-expected housing response to recent rate cuts.Hunter said last quarter’s inflation surge has rendered previous forecasts obsolete and forced the RBA to reconsider its easing bias after three cuts this year. She added that the Bank remains alert to underlying demand pressure, noting that “if we see growth running above trend for a sustainable period, that would generate inflationary pressures” and would have policy implications.She said the RBA is “constantly curious” about the economic undercurrents shaping these dynamics and is studying how structural changes may interact with the path back toward the 2–3% inflation band. ---Further from Hunter:Hunter said Australia’s labour market remains tighter than is compatible with inflation returning to the central bank’s 2–3% target. said the jobs market appears to be running “slightly beyond” a sustainable level but acknowledged the assessment is uncertain.policymakers are therefore closely examining how close the economy is to full employment as they calibrate policy. This article was written by Eamonn Sheridan at investinglive.com.