Core inflation has fallen into the Reserve Bank’s target band for the first time in more than three years.

New data released this morning by the Australian Bureau of Statistics showed headline inflation remained steady in the March quarter at 2.4 per cent.

However, the trimmed mean – the RBA’s preferred measure of core or underlying inflation – slowed from 3.3 per cent to 2.9 per cent, back in the central bank’s target range and the lowest it has been since December 2021.

The Reserve Bank’s monetary policy board will hand down its next decision on interest rates on May 20, and today’s figures are unlikely to change economists’ view that a second cut of the year is coming.

“That really does mean that the stage is now set for interest rate cuts, probably more than one,” 9News finance editor Chris Kohler said.

“We’ve got the next meeting of the Reserve Bank on May 20, and the market is fully expecting an interest rate cut.

“Before these inflation figures were released today, the market was expecting upwards of four interest rate cuts between now and the end of the year.

“Really, nothing in these figures would dissuade the market from that idea.”

That’s a view shared by analysts and economists.

“Australian quarterly CPI data came in a little hotter than expected today at 2.4 per cent. However, Aussies can still breathe easy as they’ll still get a rate cut next month, given current global trade tensions,” eToro market analyst Josh Gilbert said.

“Trimmed CPI year-over-year rose 2.9 per cent, falling inside the RBA’s target band for the first time in three years. Ultimately, this is good news, but we still won’t see Michele Bullock declaring the inflation fight is over anytime soon.

“The upside is that with growth outlooks softening, trade tensions still high, and inflation still moving in the right direction, the expectation of four cuts this year is likely to stay.

“This CPI print was arguably the biggest hurdle before next month’s RBA meeting, but with retail sales on Friday and a federal election this weekend, there’s plenty more for the central bank to stew over.”

With the cost of living playing a leading role in the ongoing federal election campaign, the new inflation figures are set to loom large in the lead-up to polling day on Saturday.

“It’s a fair chance that the government is going to be using these inflation figures to be saying that the war is now won on inflation and on come the rate cuts,” Kohler said.

Treasurer Jim Chalmers was quick to use the inflation figures as proof of Labor’s economic credentials.

“Underlying inflation is now at its lowest level in three years,” he said.

“This is a powerful demonstration of the progress that Australians have made together in the economy.

“This is proof of the responsible economic management which has been a defining feature of this Albanese Labor government.”