But bank board did not consider the case for a rate hike at its March meeting
Members of the Reserve Bank of Australia (RBA) board believe that future adjustments to the cash rate target could not be definitively confirmed or ruled out at this stage, according to the minutes of the latest Monetary Policy Meeting.
Reiterating their resolve to do what is necessary to return inflation to target, the board agreed that it was important to convey that recent data and information had not materially changed their views on the outlook after debating the balance of risks around it.
“Members agreed that returning inflation to target remained the Board’s highest priority, and that it would take some time before they could have sufficient confidence that this would occur within a reasonable timeframe,” the minutes of the March 18 to 19 meeting read. “At the same time, members noted the importance of preserving as many of the gains in the labour market as possible.
“In light of this and their assessment of the economy, members agreed that it was appropriate to characterise the policy outlook as one in which it was difficult to either rule in or out future changes in the cash rate target.”
The minutes did not indicate any discussion among the board members about the possibility of increasing the cash rate.
The Minutes of the March 2024 Monetary Policy Meeting of the Reserve Bank Board has been released: https://t.co/HWBtEFSzHa
— Reserve Bank of Australia (@RBAInfo) April 2, 2024
As in its previous monetary policy meetings, the board reviewed recent economic developments, concluding that the current cash rate should remain unchanged. The decision came after an assessment of economic indicators showed GDP growth trailing behind historical trends and population growth, with consumption remaining weak. Despite these factors, a boost from business investment and public demand were noted.
The RBA board, led by governor Michele Bullock (pictured), also discussed the labour market showing signs of easing tightness and inflation rates having been on a decline. However, the board members also pointed out that financial conditions have seen little change, with households facing restrictions and businesses experiencing some relief.
Board members, after reviewing the data, concluded that the economic outlook remains largely unchanged, acknowledging uncertainties but seeing risks as evenly balanced. Future policy directions remain open for the board, with a commitment to monitoring economic trends closely.
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