This snippet from Westpac earlier today is a useful recap of the minutes and a what to expect ahead.
- Following the April Board meeting the Governor explicitly deleted reference to the Board being patient with its approach to policy. He also noted that “Over coming months important additional evidence will be available to the Board on both inflation and the evolution of labour costs.” That suggests to us that the Board will hold rates steady at the May meeting but be prepared to move at the next meeting on June 7.
- Further evidence that the beginning of the rate hike cycle is close came in the Minutes to the April meeting where global inflation and the actions of other central banks, including the United States, were given much more emphasis than in past reports.
- Westpac expects a lift of 15 basis points in the cash rate on June 7, with 25 basis point increases at most subsequent meetings in 2022 reaching 1.25% at the end of the year. In 2023 we expect three further increases of 25 basis points with the cash rate peaking at 2% in June.
The next RBA meeting is May 3. The June meeting follows 5 weeks later, on the 7th.
Post on the minutes is here from yesterday:
The Australian election is due on May 21. Some analysts say that 'over coming months' line from the RBA gives the Bank cover to not hike ahead of the election. Seems about right!
