RBA minutes: wage growth remained subdued

Minutes of the monetary policy meeting of the Reserve Bank of Australia board were released, and as widely expected, this was a non-market event considering how much has already been said from various officials over the last couple of week's and since the previous RBA meeting.

Key statements as follows:

• Low rates helping reduce unemployment, lift inflation.
• Further progress on inflation likely to be only gradual.
• RBA repeats rising a$ would impede pick up in economic growth, inflation.
• A$ TWI still within narrow range of past couple of years.
• Underlying inflation is seen rising gradually to 2.25 pct by mid-2020.
• Strong price competition in the retail sector expected to last for few years yet.
• Wage growth remained subdued despite strong employment, recent deals to weigh on.
• Pick up in household incomes needed to support consumption, risks to the downside.
• Tighter mortgage lending rules had helped contain housing risks.
• High household debt levels still warranted careful attention.
• Housing market conditions had generally eased, especially in Sydney.
• Global growth could continue to surprise on the upside given synchronised upturn.
• Global financial conditions accommodative despite recent volatility in equity markets.

About the RBA minutes

The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.