• Cash rate decision 4.60%
• Prior decision 4.35%
• Today’s policy decision was unanimous
• Since the previous meeting, some of the upside risks to inflation are materialising
• There continue to be heightened uncertainties about the outlook for domestic economic activity and inflation
• RBA remains focused on ensuring that high inflation does not become embedded
• Inflation is still too high; some of the upside risks flagged in August are materialising
• A further tightening in financial conditions is warranted to support a return of inflation to target in a reasonable period
• Will continue to do what is necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed
• Will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions
• Full statement

There is a subtle change to the RBA's forward guidance, with policymakers dropping the specific timeline for inflation to return towards the midpoint of the target range. In August, the central bank said that:

"Inflation is still too high. It is not expected to return to around the midpoint of the target range until late 2027 and there are upside risks to this projection."

But in today's statement, they did not offer a specific timing to that and changed their wording to say:

"Inflation is still too high and the Board judged that, in light of recent developments, a further tightening in financial conditions is warranted to support a return of inflation to target in a reasonable period."

Besides that, the RBA continues to retain the option of further rate hikes if necessary, particularly if price pressures continue to pose upside risks to the inflation outlook. There is a subtle change here too. In August, further tightening was conditional on "upside risks materialising". Today, the RBA simply says it could raise rates further "if needed". The full wording:

"The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed."

All in all, there's no firm promises about what to expect in November next but the RBA is making clear that they are needing to deal with much stronger macro forces than they did before the winter. Higher energy costs, stronger domestic price pressures and persistent capacity constraints are all keeping another rate hike firmly on the table.

Coming into the decision, markets had fully priced in a 25 bps rate hike with roughly 43% odds of another move in November next. The latter has not changed by much after the decision with AUD/USD also keeping steadier at 0.7010 after a brief jump to 0.7029, not all too much changed from around 0.7008 before the decision.

It's on to RBA governor Bullock's press conference next.

This article was written by Justin Low at investinglive.com.

Source: Investing Live - Central Bank