Reserve Bank of Australia Governor Lowe speaking on Inflation Targeting and Economic Welfare
- prepared to ease policy further if demand disappoints
- reasonable to expect an extended period of low interest rates
- evidence does not support a change to our 2-3% inflation target
- "certainly possible" demand will be strong enough to lift inflation in "reasonable timeframe"
- will be some time before inflation comfortably back within target range
- board is "strongly committed" to making sure inflation returns to range
- board has paid attention to shift in outlook for monetary policy globally
- other arms of public policy could also play role in reviving demand
- "we are not inflation nutters", current target is flexible enough
- not impossible for central banks to meet their inflation targets
- important to regularly examine arguments on inflation targeting
- flexible labour market, rising participation has restrained wage growth, inflation
- flexibility of labour supply is a positive development
- flexible supply means employment growth can be stronger without overheating
- underlying foundations of the Australian economy remain strong
Headlines via Reuters
Bolding mine. Just the one comments, but really there is a lot of importance there. Lowe is committed to making sure he think the inflation target can be achieved and that the bank will do more if it has to … but he'd like assistance on the fiscal side.
A dovish Lowe, he was neve going to be otherwise after the RBA's only recent shift.
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The Australian dollar had dropped under 0.6970 on Lowe
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Full text:
Inflation Targeting and Economic Welfare
