The key points are:
The RBA left the cash rate on hold at 4.35% for the second meeting in a row. Some softer than expected readings for underlying inflation, jobs and home prices allowed it to remain in wait and see mode as it “assesses” the impact of the three rate hikes earlier this year.
However, the RBA retained a tightening bias noting that inflation Is “still too high” and is likely to remain so for “some time” and that it will do what it considers necessary to bring inflation back to target, “including increasing the cash rate further”, but with no reference to cutting.
We expect a further rate hike in November because underlying inflation is likely to take too long to fall to target and the RBA will need to do more to boost its credibility.
The post meeting statement had 16 references to inflation and just 2 references to the labour market – which reinforces where the RBA’s concerns are at present.