John Romalis

With current monetary policy settings the likelihood of the RBA undershooting its inflation target seems to be considerably greater than the probability of it overshooting its target. I am not aware of a persuasive reason why undershooting the target should be viewed any more lightly than overshooting it; and viewing it more lightly would seem to be an admission that the target has not been correctly set or stated. If you take the target as stated, and giving symmetric weight to concerns caused by deviations from that target in either direction, then the case for an easing of policy has been strengthened by continued very low inflation and the prospects for more of the same.

Outcome date: 
Monday 06 May 2019
Current rate: 
12 months: 
6 months: 

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