RBA minutes show the Bank debated a 25bp rate hike vs. holding steady

<p>Reserve Bank of Australia minutes from the October 2023 meeting.</p><p>Headlines via Reuters:</p><ul><li>
At October meeting board considered raising rates by 25bp or holding
steady</li><li>Board members judged
that case for holding steady was the stronger one</li><li>Members noted data
on inflation, jobs and updated forecasts would be available at
November meeting</li><li>Members acknowledged
upside risks to inflation were a "significant concern"</li><li>Progress in lowering
service sector inflation was slow</li><li>Board had "low
tolerance" for a slower return of inflation to target</li><li>Further tightening
may be required if inflation more persistent than expected</li><li>Rising house prices
could support consumption, might be signal policy not as tight as
assumed</li><li>Full effects of past
hikes would not be evident in data for some months</li><li>Data suggested
economy continued to grow modestly in the September quarter</li><li>Members believed the
labour market had reached a turning point</li><li>Members noted there
were few signs of wage price spiral materialising</li><li>Fall in A$ vs US$
had eased monetary conditions, though only at the margin</li><li>Trade weighted A$
only slightly lower than at start of year, limiting impact on
imported inflation</li><li>Challenges to China
economy could impact Australia if not contained</li></ul><p>-</p><p>Some interesting comments in this:</p><ul><li>upside risks to inflation were a "significant concern"</li><li>had "low tolerance" for a slower return of inflation to target</li><li>Rising house prices could support consumption, might be signal policy not as tight as assumed</li></ul><p>Offset by the usual:</p><ul><li>Full effects of past hikes would not be evident in data for some months</li></ul><p>The net effect, to me, is the RBA was quite a lot more hawkish than was originally thought at the time of the decision and Statement. New Governor Bullock a closet hawk all along?</p><p>Full text:</p><ul><li><a href="https://www.rba.gov.au/monetary-policy/rba-board-minutes/2023/2023-10-03.html" target="_blank" rel="nofollow">Minutes of the Monetary Policy Meeting of the Reserve Bank Board</a></li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.