Reserve Bank of Australia minutes from the October 2023 meeting.
Headlines via Reuters:
- At October meeting board considered raising rates by 25bp or holding steady
- Board members judged that case for holding steady was the stronger one
- Members noted data on inflation, jobs and updated forecasts would be available at November meeting
- Members acknowledged upside risks to inflation were a "significant concern"
- Progress in lowering service sector inflation was slow
- Board had "low tolerance" for a slower return of inflation to target
- Further tightening may be required if inflation more persistent than expected
- Rising house prices could support consumption, might be signal policy not as tight as assumed
- Full effects of past hikes would not be evident in data for some months
- Data suggested economy continued to grow modestly in the September quarter
- Members believed the labour market had reached a turning point
- Members noted there were few signs of wage price spiral materialising
- Fall in A$ vs US$ had eased monetary conditions, though only at the margin
- Trade weighted A$ only slightly lower than at start of year, limiting impact on imported inflation
- Challenges to China economy could impact Australia if not contained
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Some interesting comments in this:
- upside risks to inflation were a "significant concern"
- had "low tolerance" for a slower return of inflation to target
- Rising house prices could support consumption, might be signal policy not as tight as assumed
Offset by the usual:
- Full effects of past hikes would not be evident in data for some months
The net effect, to me, is the RBA was quite a lot more hawkish than was originally thought at the time of the decision and Statement. New Governor Bullock a closet hawk all along?
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