For the first time since it began hiking interest rates more than a year ago, the Reserve Bank of Australia is sounding like rates might be on hold for a while.
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Gone is the warning that "some further tightening of monetary policy may be required". In its stead, the RBA in its latest board minutes is more equivocal, talking of "whether or not a further increase in interest rates is required".
The reason for the change of tone is evident in key measures of the economy, which point to slowing spending, a softening labour market and a deepening growth downturn.
Retail sales volumes have fallen for three consecutive quarters, consumer sentiment is at recessionary lows and contemporary indicators like Commonwealth Bank's Household Spending Insights index show discretionary spending has weakened.
The slowdown in consumption is dragging increasingly heavily on activity, with gross domestic product forecast by the central bank to slow to just 0.9 per cent by the end of the year.
Reflecting this, inflation is coming down. Annual growth dropped to 6 per cent last quarter from a peak of 7.8 per cent late last year.
Developments in the labour market lag behind those in other parts of the economy and still show the unemployment rate at a 50-year low of 3.5 per cent. But the effects of slowing growth and high net migration are starting to show here too. The underemployment rate is rising and businesses have told the RBA that it is getting easier to recruit workers.
The Reserve Bank is detecting what is says are early signs of a turn in the labour market.
Added to this are mounting worries about China, which could be entering a period of deflation. The Asian nation is Australia's largest trading partner and its demand for commodities has helped the economy weather the global financial crisis and pandemic without dropping into recession.
The confluence of factors has added to central bank confidence that inflation is coming down.
But the question to this point has been whether it is coming down fast enough.
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For much of this year the RBA has been concerned that inflation may not be retreating quickly enough, raising the risk that higher inflation expectations become embedded in business pricing decisions and worker wage claims.
The balance of concern appears to have shifted, and the central bank is now more worried that further rate hikes could end hopes of holding the unemployment rate down.
Members of the RBA board warned that if interest rates had to rise "by more than otherwise" to bring inflation down, it would make it "very difficult to preserve the gains made in employment".
Underlining its more doveish attitude on interest rates, the central bank has taken to referring to monetary policy decisions to be made "over the months ahead" - a move from the view that interest rate decisions were a month-to-month proposition.
Many economists reckon rates are now on hold for an extended period, with some tipping the next move will be a cut in March or April next year.
Commonwealth Bank chief economist Stephen Halmarick forecast a March 2024 rate cut will be followed by three more by the end of next year before the official cash rate settles around 2.6 per cent in mid-2025.