"Members noted that there were several possible explanations for the higher-than-expected inflation outturn. One was that it could reflect an element of noise that occurs in economic data."
- RBA minutes
Comments from Australian policymakers can sound strange for some, taking into account weak performance by a resource-rich economy during the last couple of months. Nevertheless, there has been a shift in the RBA's mood recently, as Australian policymakers signalled their confidence in future economic performance.
This time minutes from the RBA latest board meeting showed the economy is showing signs of stabilization due to the falling Aussie, meaning more interest rate cuts from the RBA are unlikely to happen. The RBA also made it abundantly clear there will be no adjustments to its monetary policy in the coming months. Two weeks ago the central bank decided to stay pat on its policy, signalling the end of it is easing cycle under which the RBA has slashed its key refinancing rate by 225 basis points to a record-low of 2.5% over the last two years. It seems that the main reason for such a shift is a recent increase in inflation, as consumer prices accelerated to 2.7% in December, from 2.2% a month earlier, surprising not only markets but the RBA as well.
Despite less dovish comments, Australian jobseekers should not be excited about the potential improvement in the economy and the labour market in particular. According to the official projections, the growth will pick up to an above-trend pace only by the middle of 2016.
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