RBA Board Meeting Minutes May - RBA Still Sidelined

• There was little change in the RBA’s assessment on the outlook in the minutes of the Reserve Bank (RBA) Board meeting in May.
• The minutes noted that there was “a continuation of the broad trends over the preceding year or so”. It continued to present a broadly optimistic view on the outlook for the domestic and global economies.
• A new development was concerns of a “possible further tightening in lending standards” and how this would impact households.
• There was a special mention on the South Australian economy. The RBA board noted that conditions had improved across consumption, business investment and public demand. There was a discussion on the impact of the closure of the car-building industry. Despite the disruption and hardship for those directly affected, manufacturing employment in net terms had been relatively steady in recent years.
• The RBA has again highlighted that “it was more likely that the next move in the cash rate would be up, rather than down” although adding the caveat that “there was not a strong case for a near-term adjustment in monetary policy”. We continue to expect that the RBA will leave official interest rates on hold for an extended time.

 

Please see the attached report or more information.

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