RBA July minutes: RBA is committed to doing what is necessary on inflation

The minutes of the Reserve Bank of Australia July meeting. The Bank hiked the cash rate by 50bps at this meeting, as the consensus expected.

Headlines via Reuters:

• Board remains committed to doing what is necessary to ensure that inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term in Australia returns to the target over time.
• Members agreed that further steps would need to be taken to normalise monetary conditions in Australia over the months ahead.
• Members noted that gauging the level of the neutral rate is challenging in practice because it cannot be directly observed
• Members considered the possibility of raising interest rates by 25 basis points or 50 basis points.
• Level of interest rates was still very low for an economy with a tight labour market and facing a period of higher inflation.
• Members discussed three points, first that current cash rate is well below the lower range of estimates for the nominal neutral rate
• Members viewed it as important that inflation expectations remained well anchored and that the period of higher inflation be temporary.
• This suggests that further increases in interest rate will be needed to return inflation to the target over time
• Longer-term measures of inflation expectations were well anchored.
• Neutral rate framework indicates that if inflation expectations rise, level of nominal interest rates required to return inflation to the target will be higher than otherwise
• Inflation is forecast to peak later in 2022 and then decline back towards the 2 to 3 per cent range in 2023.
• Higher interest rates will also help establish a more sustainable balance between the demand for and the supply of goods and services

There is nothing to surprise in that lot.

Full text is here:

Minutes of the July 2022 Monetary Policy Meeting of the Reserve Bank Board