The RBA finds itself in a difficult position given domestic and international circumstances are contradictory. Over the coming months, major economies will likely be in recession (Europe probably already is in recession). A significant global economic slowdown implies that the RBA will likely not have to continue quite so aggressively with the current tightening cycle as slow global growth due to tight monetary policy and the energy crisis coincide with falling global inflation. Given current information, interest rates in Australia need to rise above a neutral nominal rate of 3.5% to bring inflation back to target. However, inflation is likely already falling due to adjustments in the global economy. Thus there is considerable uncertainty about the appropriate policy rate over the next year, but it is probably significantly higher than at the end of September.