The Reserve Bank of Australia keeps the interest rate unchanged, it also did not indicate any imminent change in policy.
The main headlines of the Australian Reserve meeting were as follows:
- The board will continue to rely on data and sophisticated risk assessment.
- Core inflation is still very high. - Inflation is not expected to return sustainably to our target until 2026.
- The policy will need to be sufficiently restrained so that the board is confident that inflation is moving sustainably towards the target range.
- While headline inflation has fallen significantly and will remain low for some time, core inflation is more indicative of inflation momentum, and remains very high.
- Core inflation remains high, and inflation in services is expected to decrease only gradually. - The board does not exclude anything inside or outside.
- The growth in output was weak.
- Demand still exceeds supply, despite the narrowing of the gap.
- The labor market remains tight, the demand for Labor is strong.
- Household consumption rebounded less than expected and is likely to remain stable in the third quarter.
- The Reserve Bank of Australia lowered the growth forecast for GDP and household consumption and lowered the forecast for the Consumer Price Index and core inflation.
- It is difficult to maintain wage growth at the current level without increasing productivity.
- The forecast for China has been revised upwards due to Beijing's stimulus plans.
The statements of the governor of the Australian bank, Michelle Bullock, during the press conference were as follows:
- There are still upward risks of inflation.
- The government and the central bank are not at odds over the economic outlook.
- We have the right political settings at the moment.
- If the economy falls by more than expected, we will be ready to move.
- The labor market is declining, but we do not see a significant sharp shift in fundamental conditions.
- We are looking for evidence that inflation is again moving into the target range.
- This does not necessarily mean that inflation needs to return to the range before we start moving.
- We have to make forecasts, but they are difficult by nature, and the farther your forecasts go, the greater the range of error.
- We use market pricing as part of our cash rate forecast.
- The forecast and pricing of the current cash rate path are as good as anything else, but we are ready to move if the data indicate this.
- Consumption remains a potential risk that may change our view to move faster, and production and wages are also another consideration.
- The overall risks are fairly balanced with respect to inflation and policy.
- We cannot ignore the risks caused by external developments, but our main focus is on the domestic front.
