Reserve Bank of Australia minutes from the October 2023 meeting.
Headlines via Reuters:
- At October meeting board considered raising rates by 25bp or holding
steady - Board members judged
that case for holding steady was the stronger one - Members noted data
on inflation, jobs and updated forecasts would be available at
November meeting - Members acknowledged
upside risks to inflation were a “significant concern” - Progress in lowering
service sector inflation was slow - Board had “low
tolerance” for a slower return of inflation to target - Further tightening
may be required if inflation more persistent than expected - Rising house prices
could support consumption, might be signal policy not as tight as
assumed - Full effects of past
hikes would not be evident in data for some months - Data suggested
economy continued to grow modestly in the September quarter - Members believed the
labour market had reached a turning point - Members noted there
were few signs of wage price spiral materialising - Fall in A$ vs US$
had eased monetary conditions, though only at the margin - Trade weighted A$
only slightly lower than at start of year, limiting impact on
imported inflation - Challenges to China
economy could impact Australia if not contained
–
Some interesting comments in this:
- upside risks to inflation were a “significant concern”
- had “low tolerance” for a slower return of inflation to target
- Rising house prices could support consumption, might be signal policy not as tight as assumed
Offset by the usual:
- Full effects of past hikes would not be evident in data for some months
The net effect, to me, is the RBA was quite a lot more hawkish than was originally thought at the time of the decision and Statement. New Governor Bullock a closet hawk all along?
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This article was written by Eamonn Sheridan at www.forexlive.com. Source