Reserve Bank of Australia March monetary policy meeting minutes
Headlines via Reuters:
- "very significant" monetary support to be needed for some time
- board would maintain "stimulatory monetary conditions" for as long as is necessary
- board remains committed to three-year yield target
- will not raise cash rate until inflation sustainably in 2-3% target band
- does not expect to reach targets for unemployment, inflation until 2024 at the earliest
- negative interest rate "extraordinarily unlikely"
- later in the year, members would need to consider whether to maintain April 2024 bond as the target bond or shift to Nov 2024
- board agreed it would not consider removing the target completely or changing the target yield of 10 bps
- lending standards remained sound
- AUD was assessed as being lower than it would have been without monetary policy support
- members considered the factors behind the recent rise in sovereign bond yields
- rising yields reflected growing optimism about economic outlook, increase in compensation for future inflation
- decline in liquidity in Australian govt securities market had not been as significant as that experienced during market dysfunction of march 2020
- members discussed prospects for recent increases in commodity and other input costs to translate into consumer prices
- sustained increase in inflation was considered unlikely for as long as substantial spare capacity remained in labour markets
- board would look through "transitory fluctuations" in inflation
The minutes reiterate what we are getting from Lowe and other officials. Slow wage growth will constrain inflation increases, looking at 2024 before any hike in the cash rate (in a nutshell view of the RBA).
more to come
Full text: Minutes of the March 2021 Monetary Policy Meeting of the Reserve Bank Board
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Thre was a data release at the same time the minutes were published.
House price index for Q4 +3.0% q/q (expected +1.8%, prior +0.8%
- +3.6% y/y (expected 2.9%, prior 4.5%)
