- Did not explicitly consider case for a rate hike this meeting
- Discussed circumstances in which we might have to tighten
- Did discuss what they might have to do if rates need to go up
- Need to be cautious on monthly CPI series as yet
- Inflation and jobs data will be important for February meeting
- Would not put timing on any future move, will be meeting by meeting
- We will be looking at quarterly inflation numbers
- If inflation looks to be persistent, it will raise some questions for policy
- It looks like more rate cuts are not needed
- Board does not think the downside risks have abated, upside risks are greater
The February meeting is the next one as the RBA goes on summer holiday. Needless to say the upcoming data will be critical.
AUD/USD jumped on her comments.
More:
- RBA will not react to one economic number
- Outlook is for an extended pause or rate hikes, would not put a probability on it
- Rate cuts are not on the horizon
- Looking for clues in underlying inflation on whether pick up was temporary
- The board is uncomfortable with where inflation is
- If data shows that inflation is not slowing, that will be considered at the February RBA meeting
She is certainly putting February in play but the market sees this as a scenario where February is where she would hint at a hike for the March meeting. That second meeting is now 45% priced for a hike.
