The minutes of the monetary policy meeting of the Reserve Bank of Australia (RBA) September showed that “other things being equal, members considered that the arguments for a slower pace of interest rate increases become stronger as the level of the cash rate rises“.
Featured Findings
The Inflation in Australia is at its highest level in decades and is expected to rise further in the coming months.
The Council is committed to doing what is necessary to ensure that inflation in Australia returns to target over time.
The Council is determined to ensure that inflation returns to target, but is aware that the path to achieving this must take into account the risks to growth and jobs.
Inflation is expected to peak later this year and then decline back towards the 2-3% target range.
The Board of Directors is trying to get inflation back on targetwhile keeping the economy in balance.
The labor market has remained tight and continues to indicate that the economy is struggling to meet the level of aggregate demand.
The advice expects to continue raising interest rates in the coming months, but does not have a pre-established path.
The arguments around raising interest rates by 25 or 50 basis points were discussed.
Medium-term inflation expectations remain well anchored.
Interest rates have risen quite rapidly and are close to normal values.
Source: Fx Street
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