1. The cash rate target and interest rate paid on Exchange Settlement balances in Australia will remain unchanged at 4.10% and 4.00% respectively.
2. Inflation in Australia has peaked but remains too high, with the expectation that it will gradually decline and return to the 2-3% target range by late 2025.
3. The Australian economy is currently experiencing below-trend growth, with weak household consumption and dwelling investment. However, the labor market remains tight, and wages growth is consistent with the inflation target.
4. The Board’s priority is to return inflation to target within a reasonable timeframe, as high inflation negatively impacts savings, household budgets, business planning, and income inequality. Maintaining consistent medium-term inflation expectations is crucial.
5. While recent data suggests that inflation will return to the target range and output and employment will continue to grow, there are uncertainties surrounding the outlook, including persistent services price inflation, lags in the effect of monetary policy, and uncertainties in household consumption.
Some further tightening of monetary policy may be necessary, depending on data and risk assessment. The Board will closely monitor global developments, household spending trends, and inflation and labor market outlook.