more to come Summary:RBA minutes after March hike was a tightly split 5-4 decisionBoard agreed financial conditions needed to be restrictiveMembers agreed further tightening would likely be needed, but differed on timingOil near USD100/bbl seen capable of lifting June-quarter CPI to around 5%Majority feared inflation expectations could become unanchored without prompt actionMinority preferred to wait, citing uncertainty around growth, consumption and labour market risksMinutes from the Reserve Bank of Australia’s March meeting showed the Board was united on the need for restrictive financial conditions, but sharply divided on whether to deliver an immediate rate hike, underscoring the difficult trade-off created by the Middle East conflict and its inflationary impact. The Board ultimately raised the cash rate by 25bp in a 5-4 vote, with all members agreeing that further tightening would likely be needed at some point, even if there was disagreement over timing. The minutes highlighted that policymakers saw the surge in oil prices as materially increasing the risk that inflation would remain above target for an extended period. The RBA judged that if oil prices were to remain around USD100 per barrel, annual headline CPI inflation could rise to around 5% in the June quarter, a marked lift from February’s 3.7%. For the majority, that risk was serious enough to warrant an immediate response, particularly given concerns that a delay could allow the oil shock to seep into inflation expectations and broader price-setting behaviour. Those members also argued that financial conditions were still not sufficiently restrictive and may even have remained accommodative, while downside risks to the labour market had eased in recent months and may have reversed further. In their view, acting in March was important to demonstrate the Board’s commitment to returning inflation to target. The minority took a more cautious view, arguing that uncertainty caused by the Middle East conflict could yet weigh meaningfully on domestic demand. They pointed to the possibility that household consumption could prove weaker than forecast and that the labour market may be looser than the majority judged. Even so, they did not rule out further hikes, preferring instead to wait for more information before tightening again. Overall, the minutes reinforce a hawkish message from the RBA: the hurdle for pausing has risen, but the path ahead is highly data- and conflict-dependent. The Board made clear it cannot predict the future course of rates with confidence while the war continues, leaving policy finely balanced between inflation control and rising downside risks to growth. Reserve Bank of Australia Governor Bullock This article was written by Eamonn Sheridan at investinglive.com.