RBA minutes: New stance towards inflation - Rabobank

The RBA’s February minutes out today underlined the new stance that is has towards inflation, which is about as casual as a beachside Sunday BBQ dress-code, explains the research team at Rabobank.

Key Quotes

“Inflation is expected to “only gradually” accelerate, and wage pressures to increase, despite the economic outlook being as sunny as the self-same beachside Sunday BBQ. Part of that causal attitude appears to be a recognition that strong retail competition has arrived in Australia; and just in time, perhaps, given private debt levels remains elevated and household balance sheets still warrant careful monitoring. Indeed, rapid rate increases in Australia would make much of the housing market also look like a Mad Max dystopia, and the RBA knows it.”