RBA Assistant Governor Hunter says the Board will act as needed to ensure inflation returns to target and the labour market to sustainable full employment
- Some economic costs are unavoidable; all policymakers can do is strike a balance.
- Monetary policy can potentially limit the indirect and second-round effects.
- Supply shocks do not lessen the importance of maintaining low and stable inflation.
- Not always correct to "look through" supply shocks.
- Oil shocks can potentially shift inflation expectations.
- May need a period of low inflation, higher unemployment if inflation expectations rise.
- There are few signs of a marked slowdown in activity.
- Large economic shocks can create uncertainty, reduce confidence, and constrain spending.
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