MNI RBA Review - September 2023: On Hold, Time To Assess

EXECUTIVE SUMMARY:

• At Governor Lowe’s final meeting, the RBA left rates at 4.1% for the third consecutive time. The meeting statement was little changed from August and the tightening bias was retained. There remain considerable uncertainties around the inflation and growth outlook, but while the economy evolves as expected is the Board is unlikely to raise rates.
• One addition to the statement signalled that at this juncture the Board is more confident that it is successfully navigating the “narrow path”, as it stated that while inflation and growth are moderating, the labour market is still strong and capacity utilisation high.
• Another hike can’t be ruled out and imminent easing is highly unlikely, and so at this stage, rates higher for longer is the more likely scenario. However, given the importance of the outlook any rate moves are likely to be linked with SoMP meetings. Thus rates are likely to be on hold again in October but with Q3 CPI on October 25 and updated RBA forecasts there is more uncertainty around the November meeting.

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RBA Review - September 2023.pdf