July RBA Minutes Coming Up, Watch Signs That Tightening Not Over Yet

The minutes from the July RBA meeting are published at 1130AEST and should be important for shaping expectations for the next meeting. They are likely to be scrutinised as to how “finely balanced” the decision was to pause and what may trigger a further hike at the August 1 meeting. The minutes will be available here.

• The RBA held rates at 4.1% following a likely discussion of whether to pause or tighten by 25bp.In the meeting statement, the Board chose to pause to have time “to assess the state of the economy and the economic outlook and associated risks” given the “uncertainty surrounding the economic outlook”. In June, the hike was discussed first.
• The material tightening to date allows a pause but doesn’t mean that the cycle is finished and the July minutes should indicate how convinced the Board is that higher rates are needed to bring inflation to target by mid-2025. In the June minutes, “further increases in interest rates may still be required” was removed, although it was in the meeting statement. “Some further tightening” was in the July statement and its inclusion or exclusion from the minutes is likely to be a focus.
• Any details on why the RBA changed to “forecasts for inflation and the labour market” will also be of interest. Any other triggers for further tightening mentioned in the minutes are also likely to be key to the rate outlook.