Here is what the minutes say:

Inflation has fallen substantially since the peak in 2022, as higher interest rates have
been working to bring aggregate demand and supply closer towards balance. In the
December quarter underlying inflation was 3.2 per cent, which suggests inflationary
pressures are easing a little more quickly than expected. There has also been continued
subdued growth in private demand and wage pressures have eased. These factors give
the Board more confidence that inflation is moving sustainably towards the midpoint of
the 2–3 per cent target range.

However, upside risks remain. Some recent labour market data have been unexpectedly
strong, suggesting that the labour market may be somewhat tighter than previously
thought. The central forecast for underlying inflation, which is based on the cash rate
path implied by financial markets, has been revised up a little over 2026. So, while
today’s policy decision recognises the welcome progress on inflation, the Board remains
cautious on prospects for further policy easing.