This from Capital Economics on the RBA minutes (June meeting) from yesterday, bolding mine:
Miscommunication with missing phrases?
- The minutes of the RBA's June policy meeting appear to suggest that the RBA is second-guessing its own view that the next move in interest rates will be up. But based on Lowe's more recent speech, our sense is that the RBA has only become a touch more dovish.
- The minutes excluded the line used in May's minutes that "it would be appropriate to hold the cash rate steady and for the Reserve Bank to be a source of stability and confidence". Its absence could imply that the RBA is now happy to move rates in either direction. But combined with the additional omission of the line that "it is more likely that the next move in the cash rate would be up, rather than down", it appears to suggest that the RBA is less convinced that the next change in rates will be a hike.
- We do think that the RBA has become a bit more dovish in recent months. But in his speech last Wednesday, which provides a more up to date account of the RBA's thinking than the minutes that convey the discussion two weeks ago, Lowe used both phrases - that the next move in rates is likely to be up and that steady rates help promote stability and confidence.
- So this seems to be another example of miscommunication rather than the RBA sending a strong signal that it's much less keen to raise interest rates.
- Either way, the subdued outlook for inflation and the lingering risk of tighter lending standards posed by the Royal Commission means that interest rates probably won't be raised until the late next year. And unless it is looking as though the unemployment rate is heading from 5.4% to well above 6.0%, rate cuts remain unlikely.
