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: