<p>Reserve Bank of Australia December meeting minutes</p><p>Headlines via Reuters:</p><ul><li>
Board considered hiking by 25bp, 50bp or pausing at the December meeting</li><li>Board saw arguments
for each option but the 25bp hike had the strongest case</li><li>A range of options for
the cash rate will be considered in coming meetings</li><li>Further rise in
rates likely to be needed to balance demand and supply in economy</li><li>Board noted no other
central bank had yet paused its tightening</li><li>Important to act
consistently on policy, no clear impetus from data to change from
25bp moves</li><li>Ready to return to
larger hikes if needed, or to leave rates unchanged for a period</li><li>Not on pre-set
policy path, pace and peak for rates depends on incoming data</li><li>Cash rate had
already risen significantly, though not yet at a high level
historically</li><li>Noted mortgage
payments to match the record high in 2023, real incomes and house prices
falling</li><li>The labour market is still
very tight, inflation mindset changing as firms more ready to pass on
costs</li><li>Data on private
sector wages suggested "balance of risks had shifted to the
upside"</li><li>Liaison with firms
suggested wages growth had continued to pick up in Q4</li><li>Slowdown in October
monthly CPI was welcome, but should be treated with caution</li><li>Some signs of easing
supply pressures, a sustained decline in inflation expected over 2023</li></ul><p>And, some verbatim:</p><ul><li>Members emphasised that the Board’s priority is to re-establish low inflation and return inflation to the 2 to 3 per cent target range over time. </li><li>High inflation damages the economy and makes life more difficult for people.</li><li>The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.</li><li>The Board did not rule out returning to larger increases if the situation warranted. Conversely, the Board is prepared to keep the cash rate unchanged for a period while it assesses the state of the economy and the inflation outlook</li></ul><p>–</p><p>I guess if your view is that the RBA will not be hiking any further there are a few straws you can clutch at in the minutes. On balance though I am happy to stay with my view that there are further rate hikes to come. The RBA next meet on February 7 and I expect another +25bp rate hike then. </p><p>–</p><p>Full text is here:</p><p class="title"><a href="https://www.rba.gov.au/monetary-policy/rba-board-minutes/2022/2022-12-06.html" itemprop="url">Minutes of the December 2022 Monetary Policy Meeting of the Reserve Bank Board</a></p><p>-</p><p>aud is little changed. </p>
This article was written by Eamonn Sheridan at www.forexlive.com.
