- Recent data is proving to be bumpy
- We are taking a longer view
- Must be vigilant on inflation risks
- Believes that rates are at the right level to get inflation back to target
- Don't think we necessarily have to tighten again
- But we can't rule it out; if we have to, we will
- The right stance at the moment is to stay where we are and to observe the economy
- We might have to raise rates again, but it doesn't mean we have to
- The board did discuss the option of raising interest rates
The message here is that they're not in a hurry yet to turn towards rate hikes. However, the fact that they did discuss it today means that said option is definitely open. I reckon the takeaway here is that the RBA did not produce an explicit hawkish tilt today, which disappointed a small section of the market. But by keeping the door open for hiking again, it means that any retreat in the aussie currency should be more limited; all else being equal.
