VIEW: NAB: May RBA Meeting Is Very Live According To Minutes

NAB note that “the overall impression from the Minutes is the RBA sees a case for a further tightening in policy, but was also mindful that policy had been tightened significantly in a short-period, which may overly impact indebted households. Key to policy developments will be whether the RBA can forecast inflation getting back to 3% by mid-2025. If it can’t, then the RBA will be compelled to hike again, potentially by more than one 25bp increase. NAB’s view is that the RBA will hold rates at 3.60%, though the risk is if Q1 CPI comes in broadly in line or higher than the February SoMP forecasts, then the RBA will feel compelled to hike again.”