Reserve Bank of Australia’s (RBA) August monetary policy meeting’s minutes showed that the “board expects to take further steps in the process of normalizing monetary conditions over the months ahead, but it is not on a pre-set path.”
Additional takeaways
Members noted that inflation was expected to peak later in 2022.
It is seeking to do this in a way that keeps the economy on an even keel.
Inflation will then decline back to the top of the 2 to 3 percent target range by the end of 2024.
Members agreed it was appropriate to continue the process of normalising monetary conditions.
Resilience of the economy continued to be most evident in the labor market.
Members also considered the risks to the global outlook, which were skewed to the downside.
Behaviour of household spending continued to present a key source of uncertainty for the outlook.
Members will be paying close attention to how the balance of various factors affects the outlook for spending.
Increase in interest rates over recent months has been required to bring inflation back to target.
Market reaction
The AUD/USD rebound fizzles out at 0.7025 on the RBA Minutes release. The Minutes offers no new surprise and could be read dovish.
The pair was last trading modestly flat on the day at 0.7017.