The RBA prepares to put the red pen away as inflation cools
The Reserve Bank’s meeting minutes always read like a school report card. If it really was one, then Australia is no longer failing.
The Reserve Bank’s meeting minutes always read like a school report card. If today's really was one, then Australia is no longer failing class. After months of miserable updates from the RBA about our misbehaving economy, the August report took a remarkably different tone.
The choice of the new words “reassuring” and “encouraging” in relation to the latest national inflation data are particularly soothing to rate watchers.
The source of this comfort to the board, and its decision to keep rates on hold at 4.1% on August 1, is obvious. Less than a week before the last monetary policy meeting, new quarterly inflation data was released. It revealed that in the three months to June 2023, inflation had experienced the lowest quarterly rise since September 2021. It was lower than economists were expecting. And it was widely embraced as the signal many had been waiting for that Australia had finally started to get inflation back under control.
"Members noted that the information received on inflation over the prior month had been reassuring."
