RBA Minutes: Board agreed some further tightening may be required, would reconsider at August meeting

The Reserve Bank of Australia (RBA) published the Minutes of its July monetary policy meeting on Tuesday, highlighting that the “board agreed some further tightening may be required,” adding that “they would reconsider at August meeting.”

Additional takeaways

Board considered holding rates steady or hiking by 25 bps

Strong case for both, but board judged arguments for holding steady were stronger

Board agreed some further tightening may be required, would reconsider at august meeting

Current stance of monetary policy was "clearly restrictive", and would become more so

Board discussed risks economy, consumption could slow more than expected

Noted squeeze on household finances, risk unemployment could rise more than needed

Board noted inverted yield curve pointed to tighter conditions, slowing growth

Also risks with waiting too long for inflation to return to target

Inflation proving sticky in other countries, australian rates still lower than many others

Labour market very tight, weak productivity adding to labour costs

While domestic inflation had eased, service inflation still high along with rents, energy, food

Annual wage growth seen rising to 4% in q3, following fair work award

Economy had slowed considerably, q2 gdp growth seen around +0.2% q/q

Consumer spending seen weak in q2, rebound in housing market to support consumption