In the March meeting minutes, RBA noted the “tension” between ongoing improvement in job data and slowdown in output growth in H2 2018. Leading indicators pointed to further tightening in the job market and wages growth picked up in Q4. Growth slowed but business and public spending remained positive. However, there continued to be “considerable uncertainty” around consumption outlook, given fall in house prices.
Taken into account the available information, RBA judged that current monetary policy stance was “supporting jobs growth and a gradual lift in inflation”. But “significant uncertainties around the forecasts remained”. The scenarios of a rate hike and rate hike were “more evenly balanced” than over the preceding year. And, “it would be appropriate to hold the cash rate steady while new information became available that could help resolve the current tensions in the domestic economic data.”
