Minutes of the Reserve Bank of Australia Meeting - September 2024

The Reserve Bank of Australia published the minutes of the Monetary Policy Committee meeting for September early on Tuesday morning, which included scenarios regarding lowering or raising interest rates. Below are the key points from the meeting minutes:

• Members of the Reserve Bank of Australia felt that the changes made in previous meetings were not sufficient, and that the current interest rate better balances the risks associated with inflation and the labor market.
• Future financial conditions may need to be tighter or more flexible than current conditions to achieve the Reserve Bank's goals.
• Scenarios for lowering, maintaining, or raising interest rates are all possible given the significant uncertainty surrounding economic forecasts.
• The policy may remain constrained if consumption growth picks up significantly.
• Monetary policy may need to be tightened if current financial conditions are not restrictive enough to bring inflation back to the target level.
• Monetary policy may be eased if it turns out that the economy is significantly weaker than expected.
• It is not necessary for the cash rate to evolve in line with interest rates in other economies.
• The board remained vigilant regarding the risks associated with inflation.
• Core inflation remains very high.
• Risks surrounding Australia's export outlook have shifted to the downside since the last meeting.
• Many households are still experiencing financial pressures, but only a small proportion of households and businesses are unable to service their loans.
• Monetary policy will need to remain constrained until members of the Reserve Bank are confident that inflation is moving sustainably toward the target range.
• Future changes in the cash rate target cannot be ruled out at this time.
• The Reserve Bank discussed the recent strategic review of long-term funding, and long-term funding should remain one of the options for unconventional monetary policy.