Australia central bank saw downside risks to employment when holding rates
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The Reserve Bank of Australia (RBA) considered raising its 4.35% cash rate at its June policy meeting but decided to stand pat due to the risk of a sharp slowdown in the labor market. The RBA did not rule out or in any future changes to policy. The board judged the case for holding steady was stronger given the economy was still tracking broadly as expected, with inflation seen returning to target in 2026, output growth staying weak, and risks to the labor market on the downside. The RBA has held interest rates steady for five straight meetings now. Markets are wagering there is a 36% probability that the RBA could hike in August depending on the outcome of the second-quarter consumer price inflation report due at the end of July. The board in the minutes affirmed their assessment that it was still possible to bring inflation to target while preserving job gains, though they did acknowledge that the 'narrow path' was becoming narrower. Members noted that household consumption had been revised higher in the first quarter, while there were signs that inflation was taking longer to abate than previously assumed. If inflation expectations were to rise materially from current levels, it could require significantly higher interest rates to bring inflation back to target.
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https://www.investing.com/news/economy-news/australia-central-bank-saw-downside-risks-to-employment-when-holding-rates-3504717
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