Via Westpac, chief economist there Bill Evans

In summary (any bolding mine):

From my perspective, the most important issue is around the Bank's assessment of the household sector.

  • the Board is clearly encouraged by the retail sales data for the December quarter, where volumes have rebounded (up 0.9% in real terms).
  • The Bank's liaison program is indicating moderate growth in retail sales since then
  • Despite this more encouraging news, the minutes still emphasise this key risk, "there was still a risk that growth in consumption might turn out to be weaker than forecast if household income growth were to increase by less than expected".

housing markets

  • "had generally eased"
  • The Board continues to raise the spectre of the sharp increase in supply of new apartments over the next few years.

The strength in the labour market over 2017 is recognised

  • However, the Board is more cautious about the outlook for employment growth in 2018

the Bank expects household income growth to lift

  • would be associated with a lift in wages growth, although that expectation does not sit well with the observation that "new enterprise agreements had been lower than the percentage increases incorporated in agreements they were replacing"
  • the Board speculates that wage growth might pick-up "by more than anticipated". Westpac is more cautious

despite two years of very easy policy and a strong labour market, progress on restoring inflation to the 2.5% target has been very disappointing.

The undisputed positives for the economy

  • business conditions
  • boost in construction
  • However, progress in lifting equipment investment has been limited.

The Board is more encouraged by the global economy than in December

There is no concern about the persistent strength of the Australian dollar against the US dollar.

And ...

Conclusion

As with other communications from the Bank in recent times, there is no indication of any perceived urgency to tighten policy. In particular, uncertainty persists around the consumer and the housing market.

Given Westpac's long-held view that rates would remain on hold in 2018, we were encouraged to note that the minutes point out "financial market pricing suggested that market participants expected the cash rate to remain unchanged during 2018 but had priced in a 25bps increase by early 2019".

Neither the Bank nor the markets are onside with our call for steady policy in 2019 as well, but a continuation of this benign inflation environment, weak consumer and softening housing markets could easily convince the Bank of our case.