The Reserve Bank remains concerned about inflation, which continued to ease through the first three months of the year, but remains high.
The board says demand - which is mostly consumer spending - still remains out of sync with supply. And employment remains tighter than the Reserve Bank believes is consistent with low and steady inflation and sustained full employment.
“The economic outlook remains uncertain and recent data have demonstrated that the process of returning inflation to target is unlikely to be smooth,” the board said.
RBA governor Michele Bullock chaired the RBA board meeting on Monday and Tuesday.Credit: Oscar Colman
While the board expects inflation to ease to the top of its 2-3 per cent target range by the end of next year, it remains concerned about the persistence of services inflation and expects inflation to rise in the near term partially due to higher petrol prices.
“Inflation is, however, expected to decline over 2025 and 2026,” the board said.
The board reaffirmed its commitment to getting inflation down to its target range as a priority.
“Returning inflation to target within a reasonable timeframe remains the Board’s highest priority,” the board said.
“Recent data indicate that, while inflation is easing, it is doing so more slowly than previously expected and it remains high.
“The board expects that it will be some time yet before inflation is sustainably in the target range and will remain vigilant to upside risks.
“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain, and the Board is not ruling anything in or out.”