If interest rates rise again, it may be because inflation fears lost their anchor to reality

The governor of the Reserve Bank of Australia, Michele Bullock, has warned it’s important to keep a lid on our expectations of future inflation. Photograph: Mick Tsikas/AAP

If the Reserve Bank lifts interest rates on Tuesday, governor Michele Bullock may well cite the need to keep consumers’ expectations of inflation “anchored”.

But it’s not a simple task to determine what those expectations are and whether they are anchored to reality.