RBA: Lowe mounted robust defence of the flexibility available in the central bank’s inflation target - TDS

Research Team at TDS, notes that there was nothing new in today’s RBA Minutes while in Lowe’s first speech as the RBA governor, he mounted a robust defence of the flexibility available in the central bank’s inflation target.

Key Quotes

“Saying RBA’s job is not to keep CPI between 2-3% at all times, employment and financial stability are also key factors in deciding interest rates. According to Lowe, factors holding inflation down are likely to continue for a while yet which is consistent with projections of undershooting target until mid-2017, but today’s speech did appear to lift the hurdle to cut rates further based on: 1) mining investment could be nearing an end; 2) downward pressure on wages could be nearing an end and 3) higher commodity prices.”