RBA Minutes from February meeting stated that members agreed that prevailing uncertainties meant it was not possible to have a high degree of confidence in any particular path for the cash rate

• Board concluded inflation would stay stubbornly high if it had not hiked interest rates as it did this month.
• Members agreed that the data received since the previous meeting had strengthened their concern that without a policy response, inflation would remain persistently above target for too long.
• Longer term bond yields in Australia had moved higher, reflecting changed expectations for the cash rate.
• Strategy remains to return inflation to target over time while preserving employment gains.
• Incoming data will be critical in assessing how risks evolve.
• Members noted that measures of longer-term inflation expectations appeared well-anchored and consistent with central banks’ inflation targets. However, measures of inflation expectations at the two-year horizon had increased, most noticeably in Australia.

The RBA minutes highlight a cautious stance regarding monetary policy, indicating uncertainty around the cash rate's trajectory due to prevailing economic conditions. The emphasis on inflation risks reinforces the likelihood of continued rate adjustments, which could impact both bond yields and the AUD as markets gauge future monetary direction. With inflation expectations remaining elevated, focus will shift to incoming economic data, influencing market sentiment and trading strategies across assets.