Australia appears to be further behind in the inflation and interest rate cycles than many of its peers. The RBA is also choosing a somewhat different strategy in order to preserve the gains made on unemployment since the pandemic. In doing so it is leveraging the fact that the tax system is helping dampen household demand. It is also avoiding the risk involved in a more aggressive tightening, that reversing course too late leads to an unnecessarily sharp downturn and undershoot of the inflation target.