Reserve Bank of Australia

Headlines via Reuters (bolding is mine):

  • board remains committed to doing what it reasonably can to support Australian economy
  • board would maintain "highly supportive" monetary conditions until employment, inflation goals were achieved
  • does not expect to reach targets for unemployment, inflation until 2024 at the earliest
  • board would maintain cash rate at 10 bps for "as long as necessary"
  • will not raise cash rate until actual inflation is sustainably in 2-3% target band
  • board remains committed to three-year yield target of 10 bps
  • board prepared to undertake further bond purchases, beyond A$200 bln announced, if it would assist with progress towards its goals
  • would consider extending low-cost funding facility for banks if there were marked deterioration in funding and credit conditions. no such signs currently.
  • wage, price pressures remain subdued, expected to remain so for several years
  • demand for new business loans remained subdued
  • "carefully" monitoring trends in housing borrowing, mortgage lending standards as house prices surge
  • market conditions had improved over the prior month, in part owing to bank's bond purchases
  • A$ has depreciated from recent highs to be back around levels at the turn of the year
  • preliminary data suggests march qtr gdp was likely to have recovered further to around pre-pandemic level, earlier than previously expected
  • roll out of public investment programmes over h1 2021 would be slower than foreshadowed in state budgets
  • reduced uncertainty, higher net wealth to support household consumption recovery
  • employment had returned to pre-pandemic levels "considerably faster than expected"
  • likely full effect of end of government's wage subsidy programme -'jobkeeper' - would become apparent over several months

The RBA is in monitoring mode - they are still nominating 2024 as the earliest for liftoff but if the key KPIs improve to justify moving earlier its difficult to see them delaying. Once again the Bank mentions house prices.

Full text is here: Minutes of the April 2021 Monetary Policy Meeting of the Reserve Bank Board