RBA Raises Rates to Nine Year High 2.85% says Inflation in Australia Too High

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    Reserve Bank of Australia November monetary policy meeting minutes.

    Headlines via Reuters:

    Spending might be slowed by inflation. Interest rates, falling house prices
    Data suggest Q3 GDP was solid, household spending likely rose real 1.5% q/q
    Important to avoid a price-wage spiral, board will be watching behaviour closely
    Medium term inflation expectations, wages consistent with inflation returning to 2-3% target
    Board noted easing in global supply chains. Tightening by other central banks
    Rates not on pre-set path, board resolute in returning inflation to target
    Board did not rule out returning to larger hikes, or pausing for a period
    Board saw value in being consistent with policy after hiking by 25bp in October
    Hikes having a clear impact on housing prices, have had a large effect on consumer spending in the past
    Chose 25bp given rates had already risen significantly, full effects yet to be felt
    Considered whether to hike rates by 25bp or 50bp, saw arguments in favour of both
    Board expects to increase interest rates further over the period ahead
    Stronger guidance will be considered when rates near the lower bound
    Board will not publish its own forecasts of the expected path for rates
    Forward guidance on interest rates will not always be provided
    Guidance will focus on unemployment, inflation objectives rather than drivers such as wages
    Board decided future guidance will be qualitative in nature, flexible and conditional
    Time-based guidance had not been well suited to unprecedented global events
    Time-based guidance attracted extensive criticism when rates were raised earlier than projected
    Review of forward guidance found substantial communication challenges


    The Reserve Bank of Australia raised interest rates for the eighth consecutive time on Tuesday to the highest level since early 2013. The move to rais
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