Minutes from RBA’s September meeting revealed the consensus to keep the cash rate unchanged, as members felt there had been no significant changes since the previous meeting to justify a shift in policy.
Members discussed scenarios that could lead to policy being “held restrictive for a prolonged period or tightened further”. One scenario involved stronger-than-expected “consumption growth”, driven by rising household disposable income. Another involved more “constrained” than expected “aggregate supply” outlook. Financial conditions could turn out to be “insufficiently restrictive”.
Conversely, they acknowledged scenarios where policy could become less restrictive, such as the economy proved to be “significantly weaker than expected”. Or, “inflation proved less persistent than assumed”, even without significant economic weakness.
The board reiterated their vigilance to “upside risks to inflation” and emphasized that policy will remain sufficiently restrictive until inflation is clearly moving toward target. They reiterated that future rate changes could not be “ruled in or ruled out” based on current data, leaving the door open for adjustments if necessary.
