RBA Minutes: Board ready to raise rates if upside risks materialise

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Board ready to raise rates if upside risks materialise.

"Several" board members judged quite possible upside risks to inflation would crystallise.

Other board members saw offsetting downside risks, so there was "some time" to assess incoming data.

Board agreed current cash rate appeared to be working to bring economy into balance.

Board noted it would have data on inflation, jobs and GDP by the September meeting.

Board considered whether to raise cash rate by 25 bps or keep it unchanged.

Cash rate at top end of model- and market-based estimates of neutral, but estimates uncertain.

Possible bringing inflation down faster might do less harm to labour market than first thought.

Upside inflation risks included oil prices, pass-through of cost pressures, data center boom.

RBA would need to see further progress in the data to be certain about inflation returning to target.

But policy appeared sufficiently restrictive to bring inflation to target in a reasonable timeframe.

Staff research suggested a more pre-emptive approach to monetary policy might be appropriate.

Momentum in housing market had shifted with prices falling, could slow economy.

Possible that risks to inflation were balanced, rather than tilted to the upside.