The minutes of the September policy assembly learn combined, with hawkish tones however this line appears to point the Financial institution actually thinks the speed hike cycle is over:
- The current circulation of information was in step with inflation returning to focus on inside an inexpensive timeframe whereas the money fee remained at its current degree. Members recognised the worth of permitting extra time to see the complete results of the tightening of financial coverage since Could 2022, given the lags within the transmission of coverage by way of the economic system.
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If the Financial institution backs away an excessive amount of from a hawkish bias the Australian greenback may properly come underneath additional downward stress. A decrease AUD would feed by way of to increased import costs, which might in flip feed by way of to increased inflation. This isn’t one thing the Reserve Financial institution of Australia need to see. However, that bolded comment above appears to let the cat out of the bag relating to the tip of the mountain climbing path. The subsequent essential knowledge level is the quarterly inflation knowledge due from the Australian Bureau of Statistics on October 25. Till we get that knowledge level the November RBA assembly is finest although of as a ‘stay’ assembly. We’ll make a greater evaluation after the inflation knowledge.