Highlights
The Reserve Bank of Australia has published the minutes of its March 7 meeting. Officials at that meeting increased their main policy rate, the cash rate, by 25 basis points from 3.35 percent to 3.60 percent, its highest level since 2012. The RBA has increased policy rates by a cumulative 350 basis points since an initial rate increase in May 2022.
Consistent with the statement accompanying the decision, the minutes note that monthly inflation data pointed to an easing of price pressures at the start of the year, consistent with officials' assessment that inflation likely peaked in late 2022. Officials reiterated, however, that inflation remains too high and is not expected to return to their target range of 2.0 percent to 3.0 percent until 2025.
The minutes also note that growth has slowed in recent months and that tighter monetary policy will likely weigh on consumer spending in coming months. Officials forecast GDP growth to slow to around 1.5 percent in both 2023 and 2024 but expect the labour market to remain solid.
Despite the weaker growth outlook, however, the minutes highlight that returning inflation to its target range remains the RBA's priority. In addition to the rate increase announced at meeting, officials advised that"further tightening of monetary policy would likely be required to ensure that inflation returns to target and that the current period of high inflation is only temporary".
Officials also advised, however, that they would consider the case for a pause in policy tightening at their next meeting in early April after the release of employment, inflation and retail sales data. Employment data released after the meeting showed a strong increase in employment in February, while retail sales and monthly inflation data will be released a few days before the next meeting.
Consistent with the statement accompanying the decision, the minutes note that monthly inflation data pointed to an easing of price pressures at the start of the year, consistent with officials' assessment that inflation likely peaked in late 2022. Officials reiterated, however, that inflation remains too high and is not expected to return to their target range of 2.0 percent to 3.0 percent until 2025.
The minutes also note that growth has slowed in recent months and that tighter monetary policy will likely weigh on consumer spending in coming months. Officials forecast GDP growth to slow to around 1.5 percent in both 2023 and 2024 but expect the labour market to remain solid.
Despite the weaker growth outlook, however, the minutes highlight that returning inflation to its target range remains the RBA's priority. In addition to the rate increase announced at meeting, officials advised that"further tightening of monetary policy would likely be required to ensure that inflation returns to target and that the current period of high inflation is only temporary".
Officials also advised, however, that they would consider the case for a pause in policy tightening at their next meeting in early April after the release of employment, inflation and retail sales data. Employment data released after the meeting showed a strong increase in employment in February, while retail sales and monthly inflation data will be released a few days before the next meeting.
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.
