Financial News: RBA's Hunter Says Monetary Policy Is Always Data

RBA's Hunter Says Monetary Policy Is Always Data Dependent

03/18/2025 - 02:32:00 (RTTNews)

(RTTNews) - The monetary policy is always data dependent and the link between the central bank's forecast and policy decision is not mechanical, Reserve Bank of Australia Assistant Governor Sarah Hunter said Tuesday.

There are always risks and uncertainties around the central forecast and the baseline pathway is just one of a vast number of possible outcomes, she said at the Australian Financial Review Banking Summit in Sydney. The board is now focused on US policy setting, its impact on the global economy and how it flows through to activity and inflation in Australia, Hunter noted.

Regarding the decision in February, Hunter said the board judged that it was the right time to take some restrictiveness away. However, the board was more cautious than the market about prospects for further easing.

In February, the <a href=https://www.rttnews.com/3513366/australia-cuts-key-interest-rate-for-first-time-since-2020.aspx target=_blank >RBA had reduced the cash rate</a> for the first time since November 2020. The rate was lowered by a quarter-point to 4.10 percent.

"The Board considers a wide range of possible outcomes and uses scenarios, analysis and judgment to assess the implications of different policy paths, ensuring a balanced and forward-looking approach," the banker said.

"This is why being forward looking is not in tension with being data dependent," she said.

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