The minutes of the Reserve Bank of Australia December 2018 meeting

  • Board agreed next move in rates more likely to be up than down
  • saw no strong case for a near-term change in policy
  • steady policy allowed RBA to be a source of stability and confidence
  • sluggish household incomes, high debt and falling home prices "posed downside risks"
  • had expected Q3 GDP growth to be above 3 pct for the year (vs actual 2.8 pct)
  • Expected GDP growth to run above potential this year and next
  • Leading indicators pointed to above average jobs growth for next couple of quarters
  • Further fall in the unemployment rate likely
  • Banks had slowed lending for housing investment and to small business
  • There had been a "generalised tightening of credit availability"
  • Noted a pick up in business lending by major banks to large businesses
  • Trade-weighted A$ remained within range of recent years
  • Recent sharp fall in oil prices likely to curb headline inflation globally
  • Board noted difficult to gauge underlying growth in Chinese economy
  • Growth had slowed in number of economies globally, in part due to trade tensions

quick headlines are via Reuters

Full text here: Minutes of the December 2018 Monetary Policy Meeting of the Reserve Bank Board

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As usual the RBA highlighting what it sees as positives and negatives:

+

  • jobs growth, lower unemployment
  • business lending growth (to large business)

-

  • sluggish household incomes
  • high debt
  • falling home prices
  • slower lending to small business
  • tightening in credit availability
  • slowing global growth
  • trade tension

The RBA weighed all those and seem happy to let rate stay where they are , and with no strong case for a near-term change in policy

Ah well, a bunch of PhDs reckon its all good. My editorial comment is not much changed from earlier:

AUD has done little upon the release, barely budged.