• Prior 4.10%
• Cash rate vote was 8-1
• Middle East conflict has resulted in sharply higher fuel and commodity prices, which are already adding to inflation
• There are early signs that many firms are looking to increase prices of their goods and services
• There are materially heightened uncertainties about the outlook for domestic economic activity and inflation
• There are plausible scenarios where inflation is higher and activity lower than envisaged under the baseline forecast
• There are indications that Middle East conflict could lead to second-round effects on prices for goods and services more broadly
• Inflation is likely to remain above target for some time and that the risks remain tilted to the upside
• Having raised the cash rate three times, monetary policy is well placed to respond to developments
• Focused on mandate to deliver price stability and full employment
• Will do what it considers necessary to achieve that outcome
• Full statement

The key passage in all of this is this one right here: “Having raised the cash rate three times, monetary policy is well placed to respond to developments and the Board is focused on its mandate to deliver price stability and full employment.”

That’s as clear a signal as any that they are leaning towards being on the sidelines until they get better clarity on how Middle East developments will impact the inflation outlook further.

Adding to that, they subtly toned down their language slightly after having said in March that risks to inflation have “tilted further to the upside”. This time around, they’re saying that risks to inflation “remain tilted to the upside” only. It’s not much but it is some indication of also erring more towards staying pat in June.

Besides that, the RBA notes that their baseline forecast is for “the conflict is resolved soon and fuel prices decline” but also “sees underlying inflation peaking higher than was expected in February”. However, they at least acknowledge that there could be scenarios in which the outcome is worse than what they are forecasting.