RBA’s Bullock: Rates are to remain on hold for the time being

• Did not explicitly consider a rate hike at this meeting
• Format of discussion has changed
• But recent data has not materially affected policy outlook
• Progress on underlying inflation likely remained slow in Q3
• Monthly inflation data is quite volatile (when asked about the data tomorrow)
• Headline CPI could come in within 2% to 3% target band
• But that is not really reflective of underlying inflation pulse
• Disinflation in other major economies is much more advanced than in Australia
• Our policy is also not as restrictive as others, we (rates) didn’t go up as high here
• We did discuss whether the policy messaging should change
• But message is clear that we still do not see rate cuts in the near-term
• Prepared to respond in either direction depending on the data

She’s just pretty much reaffirming their current policy stance. Apart from being pushed on a couple of questions on inflation and why not rate cuts, there isn’t really too much to harp on. The narrative now is that they continue to feel that inflation is still high and would like to see more evidence of that easing. So, that hasn’t changed since last month.

This article was written by Justin Low at www.forexlive.com.