OPINION: Philip Lowe last week skipped making a year-ahead public speech for the first time since 2016. That will increase the public interest in his appearances before parliamentary committees this week.
It is legitimate for central bank governors to be in touch with people in the financial markets, in business, in politics and in the media.
Thankfully, central bank governors have moved away from former US Federal Reserve chairman Alan Greenspan’s preference for inscrutability in favour of saying what they mean. Today, the US Fed chief holds a press conference at four of the eight yearly meetings of the Fed’s monetary policy committee. Since the RBA became politically independent in 1996, governors Ian Macfarlane, Glenn Stevens and now Philip Lowe progressively have been more willing to engage in public dialogue about the central bank’s thinking. Dr Lowe gives numerous public speeches, including at conferences hosted byIt is perhaps ironic that Dr Lowe got into trouble by extending this openness to extreme “forward guidance” about his thinking on interest rates.
in early February 2021, he said the RBA board did not expect the conditions for increasing its record low 0.1 per cent cash rate to appear “before 2024, and it is possible that it will be later than this”.The aim was to wring even more stimulus out of monetary policy at a time when the cash rate was virtually zero and the central bank had resorted to quantitative easing through its bond-buying program.
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