29-06-2025
RBA Should Abandon New 2.5% Inflation Goal, TCorp's Redican Says
Australia's central bank should ditch a new goal of hitting the midpoint of its 2-3% inflation band as the benchmark imposes unrealistic expectations on policymakers, according to Brian Redican, chief economist at sovereign investment manager TCorp.
'The focus on '2.5%' provides a false sense of precision about the ability of monetary policy to deliver a particular inflation rate two years ahead,' Redican said in a note Monday. 'Inflation will be more affected by what happens with oil prices or Donald Trump's trade policies than if the cash rate is 4.1% or 3.85%.'
