RBA raises cash rate by 50 bps to 2.35%, as expected

• Prior 1.85%
• Committed to returning inflation to the 2-3% range over time
• Inflation expected to increase further over the months ahead
• Inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term is expected to peak later this year, then decline back towards 2-3% range
• Central forecast is for CPI inflation to be around 7¾ per cent over 2022, a little above 4 per cent over 2023 and around 3 per cent over 2024
• Labour market is very tight, wages growth has picked up
• Household spending remains an important source of uncertainty
• Price stability is a prerequisite for a strong economy and a sustained period of full employment
• Further rate hikes is expected but policy is not on a pre-set path
• Full statement

There isn't much in this that isn't expected from the RBA. Markets have priced in a ~46 bps move coming into the decision, so this is fitting with expectations. There are no changes to the language and forecasts on inflation but the RBA added a line in the forward guidance to stress on 'price stability'. They also removed the reference to 'normalisation', which may infer that rates are now in neutral territory.

But the language on rate setting is not changed, as expected, with the central bank maintaining that they will need to raise the cash rate further but reaffirming that policy is 'not on a pre-set path'.

AUD/USD is little changed on the decision, keeping around 0.6805 at the moment.