Highlights
The Reserve Bank of Australia has published the minutes of its February 7 meeting. Officials at that meeting increased their main policy rate, the cash rate, by 25 basis points from 3.10 percent to 3.35 percent, its highest level since 2012. The RBA has increased policy rates by a cumulative 325 basis points since an initial rate increase in May 2022.
Consistent with the statement accompanying the decision, the minutes highlight ongoing strength in inflation, noting that it remains"too high" and that incoming data on prices and labour costs have tended to exceed expectations. Officials continue to expect headline inflation to moderate over 2023 and to fall to around the top of their target range of 2.0 percent to 3.0 percent by mid-2025. The statement also notes that growth has slowed in recent months and that tighter monetary policy will likely weigh on consumer spending in coming months, with GDP growth expected to slow to around 1.5 percent in both 2023 and 2024.
The RBA published its quarterly Statement of Monetary Policy a few days after this meeting, confirming that they do not expect headline inflation to return to the top of the target range until mid-2025, with the economy expected to grow by 1.6 percent in both 2023 and 2024. Also since the meeting the RBA Governor Philip Lowe has appeared before parliamentary hearings, responding to criticisms of the RBA's recent economic forecasts and policy responses and providing further details of the policy outlook.
The minutes published today are broadly in line with the SMP and Governor Lowe's comments to parliament. Officials expect"that further increases will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary". They also note, however, that how much further rates will need to rise depends on several factors, but they insist they"will do what is necessary" to return inflation to its target range.
Consistent with the statement accompanying the decision, the minutes highlight ongoing strength in inflation, noting that it remains"too high" and that incoming data on prices and labour costs have tended to exceed expectations. Officials continue to expect headline inflation to moderate over 2023 and to fall to around the top of their target range of 2.0 percent to 3.0 percent by mid-2025. The statement also notes that growth has slowed in recent months and that tighter monetary policy will likely weigh on consumer spending in coming months, with GDP growth expected to slow to around 1.5 percent in both 2023 and 2024.
The RBA published its quarterly Statement of Monetary Policy a few days after this meeting, confirming that they do not expect headline inflation to return to the top of the target range until mid-2025, with the economy expected to grow by 1.6 percent in both 2023 and 2024. Also since the meeting the RBA Governor Philip Lowe has appeared before parliamentary hearings, responding to criticisms of the RBA's recent economic forecasts and policy responses and providing further details of the policy outlook.
The minutes published today are broadly in line with the SMP and Governor Lowe's comments to parliament. Officials expect"that further increases will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary". They also note, however, that how much further rates will need to rise depends on several factors, but they insist they"will do what is necessary" to return inflation to its target range.
Definition
The Reserve Bank of Australia (RBA) publishes minutes of its meetings with a two week lag. The text expands on the statement published two weeks earlier at the time of the announcement.
Description
Although the RBA's Reserve Bank Board issues a detailed statement at the conclusion of its monthly meetings, investors also look to the minutes for a more detailed description of current economic outlook both domestically and abroad along with the latest RBB policy thinking.
It is only recently that the RBA has released meeting minutes. At the conclusion of their December 2007 meeting, the RBA announced several changes to its communications policy. Previously, a statement was released only if a policy change was made. Now a statement is released at the conclusion of every meeting. Another change concerned the timing of the policy announcement. Rather than waiting until the next day, the announcement occurs immediately after the conclusion of the meeting. In addition, minutes are now released two weeks after the meeting.
It is only recently that the RBA has released meeting minutes. At the conclusion of their December 2007 meeting, the RBA announced several changes to its communications policy. Previously, a statement was released only if a policy change was made. Now a statement is released at the conclusion of every meeting. Another change concerned the timing of the policy announcement. Rather than waiting until the next day, the announcement occurs immediately after the conclusion of the meeting. In addition, minutes are now released two weeks after the meeting.
