The boys (no girls at the very top, just yet) are playing with a poker face. From the RBA's Board minutes yesterday:
"Members noted that mortgage rates had increased by more than the increase in the cash rate following the November meeting, such that mortgage rates were now slightly above their average since 1996. Currently, the market did not expect any change in monetary policy for the next few months...
There had also been significant increases in the spot prices of the steel-making commodities, namely iron ore and coking coal, which were around 25 per cent and 10 per cent respectively above the December quarter contract prices, pointing to increases in contract prices for the March quarter. This was a stronger outcome than the staff had been expecting, and suggested upside risks to forecasts for the terms of trade and nominal income. The severity of the impact of the recent heavy rains in Queensland on coal production remained to be seen...
Following the Board's decision in November to lift the cash rate and the subsequent increases in lending rates, and taking into account the level of the exchange rate, monetary policy was judged to be mildly restrictive. Given the very high level of the terms of trade and the positive outlook for business investment, this policy setting was regarded as appropriate."
