RBA Statement says rates may need to go higher, full impact of rises so far not yet felt

<p>The Reserve Bank of Australia Statement on Monetary Policy (SoMP).</p><p>Headlines via Reuters:</p><ul><li>
Some further tightening may be required</li><li>Board considered
raising rates at August meeting, decided stronger case was to hold
steady</li><li>Policy has been
tightened significantly, full impact has yet to be felt</li><li>Board mindful of
lags in policy, painful financial squeeze on some households</li><li>Board keen to
preserve gains made in labour market</li><li>Tightening could
provide some further insurance against upside inflation risks</li></ul><p>RBA trims GDP growth
and inflation forecasts for end 2023, most others little changed</p><ul><li>Forecasts GDP end
2023 0.9%, end 2024 1.6%, end 2025 2.3%</li><li>Forecasts CPI at end
2023 4.1%, end 2024 3.3%, end 2025 2.8%</li><li>Forecasts
unemployment end 2023 3.9%, end 2024 4.4%, end 2025 4.5%,</li></ul><p>Full text is here:</p><ul><li><a href="https://www.rba.gov.au/publications/smp/2023/aug/" target="_blank" rel="nofollow">Statement on Monetary Policy
August 2023</a></li></ul><p>—</p><p>What's the SoMP?</p><p>The RBA's Statement on Monetary Policy:</p><ul><li>It outlines the bank's views on domestic and international economic conditions.</li><li>also provides an analysis of the bank's policy decisions and an outlook for inflation and output growth.</li><li>published quarterly </li><li>It typically includes:<ul><li>An overview of the global and domestic economic situation, which incorporates various factors such as growth, inflation, employment, and monetary and fiscal policies of key countries.</li><li>Information about financial markets, which details changes in asset prices, exchange rates, and monetary policy settings worldwide.</li><li>Domestic economic conditions, which provides a comprehensive analysis of key indicators including GDP, consumer spending, business investments, the labor market, and housing market.</li><li>Forecasts for domestic economic activity and inflation, typically for a period of two years ahead. And an assessment of the balance of risks surrounding these forecasts.</li></ul></li></ul><p>—</p><p>The hiking cycle began in May 2022 and there are thoughts it may be complete. Some are still tipping another hike though, likely in November. </p>

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