The Minutes of the RBA Board meeting on 10 December confirmed the dovish overtures from Governor Bullock and the post-meeting statement.
As usual, the Board continues to hedge its bets. For instance:
“While members judged the upside risks to inflation to have diminished, they discussed several factors that meant it was too soon to conclude with full confidence that inflation was moving sustainably towards target.”
Additionally, while there were positive signs that household consumption growth is improving, more data is needed for clearer picture given the potential for shifting spending patterns in the final months of the year.
Importantly, however, the Minutes noted that the data flow since early November had either met expectations or been softer than anticipated (Q3 GDP & WPI) and “had shifted the risks surrounding the outlook”.
Reduced momentum in GDP growth - despite upward revisions to the starting point - was said to be a “consideration underpinning [the] judgement…that the downside risks to activity had strengthened”.
