Below are the highlights Main headlines from the RBA’s July Monetary Policy Statementvia Reuters, as presented by Governor Phillip Lowe.
The Board hopes to give further steps in the process of normalizing monetary conditions.
Inflation in Australia is also high, but not as high as in many other countries.
The Council is committed to do whatever it takes to ensure that inflation returns to target over time.
The magnitude and timing of future interest rate hikes will be data driven and assessing the outlook for inflation and the labor market.
Strong demand, tight labor markets and capacity constraints in some sectors are contributing to upward pressure on prices.
Inflation is expected to peak later this year and that it will drop back to the 2-3% range next year.
One source of uncertainty about the economic outlook is the household spending behavior.
Medium-term inflation expectations remain well anchored and it is important that they remain so.
The latest data on spending have been positive, although household budgets are under pressure by rising prices and interest rates.
The Australian economy remains resilient and the labor market is tighter than it has been in a while.
The banks’ business liaison program and business surveys continue to point to higher wage growth.
Source: Fx Street
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