Reserve Bank of Australia
- Board considered holding rates steady or hiking by 25 bps
- Strong case for both, but board judged arguments for holding steady were stronger
- Board agreed some further tightening may be required, would reconsider at August meeting
- Current stance of monetary policy was "clearly restrictive", and would become more so
- Board discussed risks economy, consumption could slow more than expected
- Noted squeeze on household finances, risk unemployment could rise more than needed
- Board noted inverted yield curve pointed to tighter conditions, slowing growth
- Also risks with waiting too long for inflation to return to target
- Inflation proving sticky in other countries, Australian rates still lower than many others
- Labour market very tight, weak productivity adding to labour costs
- While domestic inflation had eased, service inflation still high along with rents, energy, food
- Annual wage growth seen rising to 4% in q3, following fair work award
- Economy had slowed considerably, q2 GDP growth seen around +0.2% q/q
- Consumer spending seen weak in q2, rebound in housing market to support consumption
Bolding above is mine. The August 1 RBA meeting is live.
Full text:
AUD/USD had a pop on the lead up to and after the release:
