- The point was made that policy rates were coming closer to a level where caution was needed to ensure that monetary policy was not tightened excessively
- In view of the high uncertainty, the inflation outlook could change rapidly in either direction
- But the point was also made that expressing an “intention” was different from giving a “commitment”
- A further 50 basis point interest rate hike at the March meeting was consistent with a very wide range of possible scenarios
- There was wide agreement that there were no signs of a wage-price spiral
- But it was argued that current wage growth was clearly not consistent with a 2% inflation target
- Full accounts
In other words, they actually wanted to try out a different communique than to "commit" to a 50 bps move in March. As much as they want to distinguish between "intention" and "commitment", when you communicate such an "intent" to markets, it is pretty much a "commitment" of sorts already in my view. At the end of the day, it's just semantics.
