RBA Minutes from May meeting stated the board judged financial conditions would be somewhat restrictive after May hike and that a hike would provide space to see how the Gulf conflict develops, as well as response of households and business

Says: For future decisions, the board agreed monetary policy could not alter the near-term trajectory of inflation, and the board agreed Australian economic growth is likely to be below potential for some time. Board will do what is considered necessary to meet inflation and employment mandates. Majority emphasised core inflation was projected above target for an extended period. Board considered whether to hike by 25bps or to keep rates at 4.1%, while eight members considered the case for a hike to be the strongest, and one wanted to wait for more information. Judged additional loosening in the labour and product markets was needed given inflation risks, while the majority felt risks to inflation objective have risen, and were not confident 4.1% was enough to offset the risks. Saw risks longer-term inflation expectations could become de-anchored. One member felt capacity pressures are not as great and a protracted war is more of a risk to demand, while a member expected inflation to return to the target without further tightening.