Minutes show an intense focus on inflation risks and inflation expectations after the Australian Reserve raised the interest rate during the latter's meeting by 25 basis points to 4.35%
The main headlines were: -
- The Bank considered the status or stability of interest rate hikes
- The Governing Council considered that there was no need for a rate hike at this meeting
- But the argument judged in favor of rate hikes was strongest given rising inflation risks
- The likelihood that more emphasis will be needed will depend on data and risk assessment
- It's important to prevent a modest increase in inflation expectations
- The growing mindset among companies that can pass on cost increases to customers
- The Board noted that the monetary interest rate remained lower than that of many other countries
- Rising house prices may suggest the policy was not particularly restrictive
- The dramatic rise in local population growth has made it more difficult to judge the resilience of the economy
- Inflation and the economy were slowing, as geopolitical and global expectations were uncertain
- Rising tensions in the Middle East could hinder global growth
