Notes on the inflation outlook:

• Underlying inflation is still expected to return to the 2–3% target range by mid-2025, settling slightly above the midpoint.
• Recent monthly CPI data suggests trimmed mean inflation may fall below 3% in Q1 2025.
• Wage growth (WPI) has eased slightly, but unit labour costs have risen sharply (~5.5% YoY in 2024), complicating the inflation picture.
• Inflation risks are two-sided:

Notes on the employment outlook:

• The labour market remains tight, but with signs of easing:
• Some softening in labour market indicators (e.g., falling quits rate) may suggest reduced inter-firm competition for labour.
• RBA is closely monitoring labour market data, with uncertainty over whether capacity is greater than currently estimated.

Notes on the growth outlook:

• GDP growth picked up in Q4 2024 as expected, led by private and public demand.
• Household consumption is recovering, supported by rising real incomes and lower debt servicing costs.
• Business credit growth has strengthened, though housing credit has moderated.
• The domestic economy is tracking broadly in line with February forecasts, with risks on both sides:

Implications for monetary policy and key decisions:

• Cash rate held steady at 4.10%; Board judged conditions too uncertain to move either way.
• The February rate cut is still working through the economy; financial conditions remain “somewhat restrictive.”
• Major concern: increased global trade policy uncertainty, but domestic effects are not yet material.
• Policy remains focused on bringing inflation back to target without sacrificing labour market gains.
• The Board emphasized a cautious, data-dependent approach, with May flagged as a key decision point due to incoming data and new forecasts.
• The Board’s strategy remains to balance inflation control with employment preservation, and they reiterated that future moves are not predetermined.