• Data on inflation for the March quarter provided further evidence that inflation continues to ease.
  • Staff forecasts released today project that while headline inflation is likely to rise over the coming year to around the top of the band as temporary factors unwind, underlying inflation is now expected to be around the midpoint of the 2–3 per cent range throughout much of the forecast period.
  • While recent announcements on tariffs have resulted in a rebound in financial market prices, there is still considerable uncertainty about the final scope of the tariffs and policy responses in other countries
  • These developments are expected to have an adverse effect on global economic activity
  • World trade policy is changing rapidly, thereby making the central forecasts subject to considerable uncertainty.
  • Private domestic demand appears to have been recovering, real household incomes have picked up and there has been an easing in some measures of financial stress
  • A range of indicators suggest that labour market conditions remain tight
  • There are uncertainties about the outlook for domestic economic activity and inflation stemming from both domestic and international developments
  • The Board judged that the risks to inflation have become more balanced
Source: Forex Live