VIEW: CBA: Minutes Intentionally Vague - Tightening Cycle Is Nearly Done

In light of the release of the minutes from the RBA’s December decision CBA note that “overall we are left with the impression that the RBA would like to pause in the tightening cycle. But we don’t know what they are willing to hang a pause on. The case to keep the cash rate unchanged for a period of time to assess the state of the economy and the inflation outlook is strong. And yet the Board has not stated when that condition will be met.”

• “In summary the RBA’s forward guidance is sufficiently vague that all options will be on the table at the February 2023 Board meeting.”
• “Our base case is unchanged. We expect one further 25bp rate hike in early 2023 that would take the cash rate to 3.35%. We continue to expect rate cuts in late 2023 and have pencilled in 50bp of easing in Q423.”