Responses to the RBA minutes coming in – more

I posted earlier some commentary from CBA:

This now via Westpac, in brief (bolding mine):

  • provided no real surprises although from our perspective there is some confusion as to the Bank’s growth forecast for 2018.
  • When the Governor made his statement following the Meeting, he changed the growth assessment for 2018 from “a little above 3%” to “faster than 2017”. That appeared to be a substantial change given that the expectation was that growth in 2017 (to print the following day in the December quarter GDP report) was expected to be only 2.5%. In today’s Minutes, we get a third variation where growth in 2018 is described as “expected to exceed potential growth”. Potential growth is assessed by the RBA as 2.75%. So, we can conclude that despite sending somewhat different signals, the Statement and the Minutes are both pointing to a somewhat lower growth outlook for 2018. Note that the forecast for the February Statement on Monetary Policy was 3.25% and we will receive the next forecast on May 4.


  • discussion around consumption is little changed
  • still “uncertainty surrounding the outlook for consumption growth”
  • outlook for business investment, concluding that there may be some upside risks to the Bank’s forecasts in growth in non-mining business investment over the medium term
  • discussion on the labour market continues to be dominated by the word “gradual”; “wages growth was expected to rise gradually and spare capacity in the labour would continue to decline gradually”
  • Housing markets … slowed  … housing credit growth had eased … However … … household balance sheets continued to warrant “careful monitoring”
  • Commentary around the Australian Dollar is unchanged
  • conditions in the global economy are assessed as continuing to improve with a broadly based upswing. Nevertheless, the minutes repeat the Bank’s long-held view that Australia’s terms of trade are likely to “decline over the following few

WPAC finish with their outlook for the Bank:

  • We continue to expect that the cash rate will remain on hold in 2018 and 2019.With growth slowing to below trend in 2019, we cannot see a case for higher rates in that year either.


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