RBA Minutes: Financial Conditions Restrictive but Activity Resilient

The RBA raised its cash rate to 4.35% in May, viewing conditions as restrictive while remaining alert to upside inflation risks from fuel costs and resilient demand. Goldman Sachs anticipates one final 25bp hike to 4.60% in June.

Key Takeaways

• 1.The RBA Board raised the cash rate to 4.35% in an 8-1 majority vote, citing high inflationary pressures and a need for 'space' to monitor global conflicts.
• 2.Goldman Sachs forecasts a further 25bp hike to a terminal rate of 4.60% in June, as RBA analysis suggests faster pass-through of fuel costs to inflation.
• 3.Economic activity remains resilient with little evidence of significant impact from Middle East conflicts on household or business spending to date.

Table of Contents

• Bottom line
• Main points
• The Australia and NZ Economics Team
• Disclosure Appendix
• Global product; distributing entities
• General disclosures

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial