RBA Minutes Say It Remains Ready to Raise Rates if Needed

The Reserve Bank of Australia’s minutes from its June meeting said monetary policy needed to remain restrictive to remove excess demand in the economy.

According to Jin10, the minutes were finalized before Brent crude prices fell by more than 10% over the previous week, creating a disconnect between the document’s hawkish tone and current market moves.

Markets were pricing only about 10 basis points of additional tightening by year-end, while pricing about 17 basis points of easing by 2027.

The Australian dollar faced mixed signals, with the RBA stating it remained prepared to raise rates again if necessary, while markets viewed rates as likely having peaked. The report said that if upcoming data confirmed that softer oil prices were gradually feeding into inflation expectations, the Australian dollar could face repricing.

Separately, falling home prices in Sydney and Melbourne were described as increasing risks to domestic economic growth, which could further reinforce a more dovish market repricing even if the RBA board’s wording remained clearly tilted toward restraint.