Here is Westpac’s take on the RBA Minutes today (with thanks):
Conclusion:
Despite market pricing now pointing to a rate cut over the next six months there’s no evidence in the minutes to indicate that the Board is seriously considering this option.
The best way to assess the current policy stance is that the Bank is quite comfortable to await further developments before committing to any policy option.
It does not appear to be particularly worried about the emerging weakness in the consumer sector and provides strong emphasis around the sharp lift in residential investment.
That view around the consumer may well have been jolted by the release of the May retail sales numbers which showed a 0.5% contraction.
As discussed above, the most curious aspect of these minutes appears to be that the Bank may be preparing to shorten the ‘on hold’ policy stance. This may be over-reading the subtle changes in the commentary but the decision to exclude “Those uncertainties were likely to take some time to resolve” and “some time yet” in the final sentence may be interpreted in that way.
For our part we remain comfortable with our call that rates will be on hold until the September quarter next year.
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The earlier headlines are here: RBA Minutes: RBA repeats most prudent course is likely period of stability in rates
