Reserve Bank of Australia November meeting minutes, Headlines via Reuters:
- Considered case for raising rates or holding steady
- Board saw "credible case" that a rate rise was not needed at this meeting
- But judged case for hiking was the stronger one given inflation risks had increased
- Whether further tightening required would depend on data, assessment of risks
- Saw risk that inflation expectations could increase if rates were not raised
- Important to prevent even a modest further increase in inflation expectations
- Growing mindset among businesses that cost increases could be passed on to customers
- Noted staff forecasts for inflation at meeting assumed one or two more rate rises
- Board noted cash rate remained below that in many other countries
- Rising house prices could indicate policy was not especially restrictive
- Surge in domestic population growth made it harder to judge resilience of economy
- Inflation and economy were slowing, geopolitical and global outlook uncertain
- An escalation in tensions in the middle east could be a drag on global growth
Bolding above is mine. Very hawkish!
There is some real meat in these minutes. That summary above has the usual 'data dependence', 'case to not raise rates', the usual caveats. But the over riding impression is of a Bank somewhat behind the curve, or risking slipping behind the curve, and keen not to do so.
These:
- Saw risk that inflation expectations could increase if rates were not raised
- Important to prevent even a modest further increase in inflation expectations
- Growing mindset among businesses that cost increases could be passed on to customers
- Noted staff forecasts for inflation at meeting assumed one or two more rate rises
- Board noted cash rate remained below that in many other countries
are very hawkish indeed from the RBA. Yes, there are less hawkish remarks also, but overall this is a bit of a purpose from the Bank.
AUD/USD higher.
