The RBA Monetary Policy Board held the cash rate at 4.35% today as widely anticipated, including by us. The vote was unanimous.
The Board’s statement wasn’t as hawkish as anticipated and markets reacted in that fashion.
The Board noted that there are upside risks to the Bank’s inflation forecasts and this was identified as key risk #1 in the Statement.
But the Board said that they will hike again only if upside risks to inflation materialise.
“The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if upside risks materialise.”
But then Governor Bullock’ press conference appeared to walk back the perceived lack of hawkishness from the Board.
