Reserve Bank of Australia June meeting minutes. Headlines via Reuters:
- The RBA Board judged the case for holding rates steady stronger than for hiking
- Needed to be vigilant to upside risks to inflation, data suggested upside risk for May CPI
- Economic uncertainty meant it was difficult to rule in or out future changes in policy
- Recent data not sufficient to change outlook for inflation returning to target by 2026
- Judged still possible to bring inflation to target while keeping employment gains
- Board saw downside risks to the labour market, vacancy rates pointed to weakness
- Unemployment rate could rise quickly as it had done in the past
- Continued rapid rise in business insolvencies would be negative for jobs
- Wise to give little weight to upward revisions to household consumption
- Q1 GDP growth had been very weak, wage growth looked to have peaked
- Hike might be needed if board judged policy was not "sufficiently restrictive"
- August forecast round would allow staff to carefully judge spare capacity in economy
- Judgements about spare capacity were very uncertain, should be treated with caution
- Inflation expectations still anchored, but market premia had drifted higher
- A material rise in inflation expectations could require significantly higher rates
There isn't much in these Minutes to sway the case for a move to hike rates at the next meeting, in August. The August meeting will be right after the next official reading on quarterly CPI, due July 31.
The headline I popped on the post is probably the most interesting point given the inflation expectations data we had earlier:
Those expectations, from the weekly survey, won't carry a huge amount of weight in RBA discussions, but they won't be ignored either.
I think the TL;DR on these minutes is we have to wait for the CPI report on July 31 for a guide to what the Bank will do at its August, on the 5th and 6th, meeting.
AUD is up a touch, not a lot of movement during the session here following the drop on Monday, US time:
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From the day of the statement:
