In the minutes of the July 5 meeting, RBA noted that members considered raising interest rates by 25bps or 50bps. The arguments for a 50bps hike were “stronger”.
“The level of interest rates was still very low for an economy with a tight labour market and facing a period of higher inflation,” the minutes noted. “Members viewed it as important that inflation expectations remained well anchored and that the period of higher inflation be temporary.”
Also, board members agreed that “further steps would need to be taken to normalise monetary conditions in Australia over the months ahead,” The “size and timing” of future hikes will be guided by “incoming data” and assessment of the outlook for “inflation and labor market”.
