The RBA minutes contained very little we hadn’t read before or heard Governor Lowe state in his speeches this month. These minutes are unlikely to change economists’ forecasts for the October 4 meeting, which are now skewed towards 50bp in line with the market.
- The board discussed both 25bp and 50bp moves but decided on the latter given the relatively low level of rates and the potential damage inflation can do to the economy. The RBA’s commitment to price stability is reiterated in the minutes. Lowe told parliament that the choice between 25bp and 50bp will be discussed in October too.
- The RBA stated that it will continue to pay close attention to the “evolution of labour costs and the price-setting behaviour of firms”, and the development of the uncertainties surrounding household expenditure. It repeated that it is not on a “pre-set path” and that it will continue to be “guided by the incoming data”.
- The board decided to hike rates in September because of the elevated inflation, solid economy, tight labour market, capacity constraints and pricing power.
- Read here https://www.rba.gov.au/monetary-policy/rba-board-minutes/2022/2022-09-06.html