Education

A reaction function is the implicit rule that describes how a central bank responds to economic conditions. If inflation runs too high, how forcefully does it raise rates? If unemployment rises, does it ease? The RBA does not publish a formula. The Monetary Policy …

A textbook inflation-targeting central bank responds symmetrically: raising rates when inflation is too high and cutting when it is too low. If forecasters believed the RBA operated that way, sustained low inflation should have led them to expect rate reductions. Research Discussion Paper 2026-06 …

Bullock's statement used the word "most" rather than "all" capital cities. This means the decline is broad but not universal. Some markets may still be holding their value or declining more slowly. The aggregate direction is downward in the majority of cities, which represents …

In central banking language, inflation becomes embedded when it ceases to be a response to a specific shock and starts feeding on itself. Businesses raise prices because they expect costs to keep rising. Workers seek higher wages because they expect prices to keep rising. …

The nine members of the Monetary Policy Board are: Michele Bullock (Governor and Chair), Andrew Hauser (Deputy Governor and Deputy Chair), Marnie Baker AM, Melinda Cilento, Renee Fry-McKibbin, Carolyn Hewson AO, Bruce Preston, Iain Ross AO, and Jenny Wilkinson PSM. The September decision was …

This publication's arithmetic, not an RBA calculation: headline inflation at 4.3% minus the 2.5% midpoint leaves a gap of 1.8 percentage points. Against the top of the range at 3%, the gap shrinks to 1.3 percentage points. If underlying inflation at approximately 3.5% is …

Start with where inflation stands. On the RBA's homepage, headline CPI is at 4.3% against a 2-3% target range. Bullock also described recent annual inflation as running at around 3.5 to 4 per cent, and at her September media conference said "the underlying inflation …