MNI RBA Review - September 2022: Something For Everyone As Normalisation Phase Ends

EXECUTIVE SUMMARY

• The RBA delivered the widely expected and virtually fully priced 50bp rate hike at its September meeting, as it reaffirmed its view on inflation and once again pointed to the narrow path that it finds itself on as it looks to keep the economy on an even keel in its quest to return inflation to the target band.
• On net, the RBA sounded more hawkish on the domestic labour market, emphasised a little more focus on the fight against inflation, while alluding to the end of its normalisation phase and providing a slightly more downbeat assessment of the external environment, as well as a challenging medium term outlook.
• Focus now moves to Governor Lowe’s annual address in front of the Anika Foundation, which will take place on Thursday and cover the topic of “Inflation and the Monetary Policy Framework.” We look for the Governor to be non-committal when it comes to the size of the upcoming rate hikes, underscoring the Board’s data-dependent optionality, but that doesn’t mean the Q&A session won’t see a push for greater clarity.
• Click to view full review: MNI RBA Review - September 2022.pdf