Reserve Bank of Australia's Luci Ellis, Assistant Governor (Economic):

  • Neutral rate is a guide rail for policy not a destination
  • Real neutral rate is uncertain but should be positive, even if low
  • In Australia, that implies nominal neutral rate is at least 2.5%
  • Neutral rate is a long run concept, should use inflation expectations
  • Inflation expectations over one year remain well anchored inside 2-3% target range

more to come

Full text:

Reserve Bank of Australia's Luci Ellis, Assistant Governor (Economic) speaking to the Committee for