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
Importance
Level 1
- 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.
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