RBA’s Stevens: Current inflation target regime has flexibility

Reserve Bank of Australia (RBA) Governor Glenn Stevens is on the wires now, making his final speech before retirement at the Anika Foundation Luncheon, in Sydney.

Key Quotes (via Reuters):

Current inflation target regime has flexibility, still useful

Need realism on what monetary policy can do, including pushing up inflation quickly

Board aware of risks of trying to push inflation to target in "short order"

Undershooting inflation target with reasonable economic growth might be "least bad" option

Monetary policy cannot "simply dial up" the economic growth we need

Hard for monetary policy to revive demand when households so indebted

Case for governments to borrow for investment assets that yield economic return

Not advocating governments borrow to fund recurring spending

Path to budget balance turning out to be a very long one, many difficult choices to be made

Australia's trend growth rate has slowed a little, demographic drag to last for decades