Reserve Bank of Australia Governor Philip Lowe is speaking today, due at 0305GMT on Thursday 25 July 2019
The topic is Inflation Targeting and Economic Welfare, at the annual Anika Foundation Luncheon, Sydney.
Ahead of this speculation that the RBA's inflation target will be lowered has gathered pace. Its not rampant, but it won't go away. The inflation target speculation is interesting because if the target was lowered (chill, it won't be) it takes further RBA rate cuts pretty much off the table for the foreseeable future.
Fuelling the chatter, on this occasion, is that with the Australian election out of the way, Treasurer Frydenberg is reviewing the monetary policy agreement between the federal government and the Reserve Bank of Australia. The agreement has been around for about 20 years and is refreshed form time to time. Frydenberg spoke with local financial press here in Oz:
- "I will be signing an agreement in due course, but am currently taking advice from Treasury, after which I will have a discussion with the governor."
Frydenberg gave no indications there will be much change in the agreement (the agreement's title is Statement on the Conduct of Monetary Policy), indeed signs are any changes will be marginal. Changing the inflation target is not a marginal change.
The inflation target band will remain between 2 and 3 per cent over the course of the economic cycle.
Treasurer Frydenberg
