Boeing factory workers are voting whether to strike and shut down aircraft production
Durex makes India condom push for women, rural consumers
Australia introduces bill to step up fight against hate crimes
Russian hawk pushes case for Putin to toughen policy on nuclear weapons
Thai consumer confidence drops to 13-month low in August as growth slows
Billionaire's spacewalk with SpaceX delayed several hours hundreds of miles above Earth
Murdoch succession battle to play out in Nevada courtroom
Pac-12 targeting Boise St., Fresno St., San Diego St., Colorado St. for rebuild, AP sources say
Reggie Bush was at his LA-area home when 3 male suspects attempted to break in
SYDNEY (Reuters) - Australia's central bank judged a near-term rate cut was unlikely and policy might need to stay restrictive for an "extended period" to ensure inflation can be tamed, after debating whether or not to hike at its August policy meeting.
Minutes of its Aug 5-6 board meeting out on Tuesday showed the Reserve Bank of Australia (RBA) considered raising its 4.35% cash rate as underlying inflation remained too high at 3.9% and financial conditions appeared to have eased, with a pickup in credit growth and house prices.
However, it decided the case to hold steady was the stronger one as it would best balance the risks to both inflation and the labour market, given prevailing uncertainty about staff forecasts, market volatility and expectations for rate cuts.
In particular, the board judged market pricing for rate cuts in the coming year, including a first easing by December, was incompatible with a return of inflation to the mid-point of the target band of 2-3% in 2026.
As a result, the RBA felt the need to push back against talk of a near-term reduction in rates and might possibly keep rates steady for "an extended period".
"Members also observed that holding the cash rate target steady at its current level for a longer period than currently implied by market pricing may be sufficient to return inflation to target in a reasonable timeframe, but that the board will need to reassess this probability at future meetings," the minutes showed.
The board also stressed that it was appropriate to continue placing somewhat greater-than-usual weight on the flow of data given the degree of uncertainty about the staff's forecasts for spare capacity, unemployment and consumer demand.
The RBA has held interest rates steady for six straight meetings now, having raised them by 425 basis points to a 12-year high since May 2022.
Markets are wagering there is an 84% probability that the RBA could cut by the year-end, and a cut in February is more than fully priced in.
(This story has been refiled to fix a typo in paragraph 7)
(Reporting by Stella Qiu)
