RBA Stands Pat on Global Growth Concerns

The RBA today left interest rates unchanged despite concerns over inflation. In the RBA's words:

The Board remains concerned about the outlook for inflation. But given the heightened uncertainty about the international outlook and the local trends in wholesale borrowing costs, both of which could have a bearing on inflation over the medium term, it judged that the current stance of monetary policy should be maintained for the time being.

Reading between the lines the RBA thinks that the greater risk is the threat to the global growth outlook going forward despite inflation running above the high end of the RBA's preferred range. As I mused yesterday if credit markets do not recover and US growth slows sharply into a hard landing scenario then the RBA could be done raising rates for some time.