RBA Minutes: Shift to neutral stance - TDS

According to analysts at TD Securities, today’s release of RBA’s February  minutes are a truer representation of the shift in RBA stance to neutral compared to the RBA statement delivered 2 weeks ago.

Key Quotes

“The Minutes indicate the RBA acknowledges the risks posed by falling house prices: “However, members observed that if prices were to fall much further, consumption could be weaker than forecast, which would result in lower GDP growth, higher unemployment and lower inflation than forecast.” That said the RBA remains optimistic noting: “Given that further progress in reducing unemployment and lifting inflation was a reasonable expectation, members agreed that there was not a strong case for a near-term adjustment in monetary policy.”