The Reserve Bank of Australia Statement on Monetary Policy is here: RBA Statement on Monetary Policy (SOMP) - GDP forecasts little changed

And, more: How much longer will the RBA be content with inflation below target?

This now via Westpac, in brief (bolding mine):

On the lower inflation forecasts:

the decision to lower the forecasts to below the bottom of the band in 2018 and at the bottom of the band in 2019 has significant policy implications. We are now assessing a central bank which is expecting that it will undershoot its core inflation target for another year, and that even one year out, inflation will still be at the bottom of the target zone.

... We are not changing our view that rates will remain on hold in 2018 and 2019, but we have always been uncomfortable that the central bank's forecasts were implying that it was expecting that it would be raising rates in 2018. These forecasts no longer portray a central bank that expects to raise rates.

And WPAC concludes:

This is a significant set of forecast revisions and we believe signals a changed policy outlook from the Bank itself. While the Governor will continue to indicate that the next move in rates will be up, we think that the rhetoric around a long period of steady rates will gain further emphasis.

Forecasting another year of inflation undershooting the target zone might, in other circumstances signal a central bank which is contemplating further rate cuts. However, it still believes that growth will lift to above trend, and the experience of 2016, when two rate cuts triggered another surge in house prices will temper any inclination to cut again.


WPAC remains no rate chages in 2018 and 2019 for now.