RBA Minutes from May meeting stated the board judged financial conditions would be somewhat restrictive after May hike and that a hike would provide space to see how the Gulf conflict develops, as well as response of households and business

Says:

• For future decisions, the board agreed monetary policy could not alter the near-term trajectory of inflation, and the board agreed Australian economic growth is likely to be below potential for some time.
• Board will do what is considered necessary to meet inflation and employment mandates.
• Majority emphasised core inflation was projected above target for an extended period.
• Board considered whether to hike by 25bps or to keep rates at 4.1%, while eight members considered the case for a hike to be the strongest, and one wanted to wait for more information.
• Judged additional loosening in the labour and product markets was needed given inflation risks, while the majority felt risks to inflation objective have risen, and were not confident 4.1% was enough to offset the risks.
• Saw risks longer-term inflation expectations could become de-anchored.
• One member felt capacity pressures are not as great and a protracted war is more of a risk to demand, while a member expected inflation to return to the target without further tightening.