RBA's Kent says Board sets level of the Cash Rate it judges will achieve low and stable inflation and full employment, adds borrowing costs have increased, mortgage payments have risen and conditions in the established housing market have turned down

Australian dollar has appreciated over the year to date.

Moreover, the growth of aggregate demand appears to be slowing and this is intended and is needed to bring inflation back to the target.

Housing market appears to have softened by somewhat more than the recent increase in interest rates would imply, contributing to financial conditions potentially being a bit more restrictive than otherwise.

Conversely, resilient global demand because of AI related investment as well as high yields offshore because accumulation of large public debts will tend to contribute to financial conditions in Australia being less restrictive than otherwise.

In conclusion, evidence suggests that monetary policy in Australia is somewhat restrictive, and that the tightening earlier this year is working.

Speeches of this kind from a senior RBA official typically function as a conditioning exercise rather than a signal of imminent action: the Bank has a long record of using housing and the transmission of rate rises through the mortgage book to explain why policy is judged restrictive, and Kent's comments sit squarely in that tradition. The point of emphasis, that the housing market has softened by more than the rate increase alone would imply, is the part desks will read as dovish shading, since acknowledging conditions are more restrictive than intended has historically preceded a gentler stance at subsequent meetings. The counterweight is deliberate: by citing resilient global demand, AI-related investment and high offshore yields as making conditions less restrictive, the Bank is framing the domestic tightening as working without implying it has overshot. The relevant distinction is between commentary that merely describes restrictiveness and commentary that flags it as excessive; this is the former. What tends to matter next is whether the Board's subsequent communications repeat the housing softness line and how it sits against the next inflation and labour prints, since the RBA has historically been among the more patient of the major central banks in both directions. For rates and AUD, remarks of this kind typically move the front end and the currency only at the margin unless they deviate from the prevailing meeting rhetoric.