RBA’s minutes from March 18-19 meeting revealed no explicit discussion on rate hikes, marking a departure from previous communications that outlined the board’s considered options.
The board assessed that it would require more time to gain “sufficient confidence” in inflation’s return to target range within a foreseeable timeframe. At the same time, it emphasized on the priority to “preserve as many of the gains in the labor market as possible.”
These considerations led to the characterization of the policy outlook as ambiguous, with the board finding it “difficult to either rule in or out future changes” in the cash rate target.
Inflation remains elevated, albeit on a gradual decline towards the target, while labor market is approaching conditions synonymous with full employment. In light of these observations, maintaining the cash rate target unchanged was deemed the most suitable course of action.
The board also recognized that risks had become little more even”, noting that recent data did not suggest “materialisation of upside risks to inflation” and confirmed an anticipated slowdown in economic output.
