Now we know. The Reserve Bank has spelled out what it will do when rates approach zero

Governor Lowe's speech suggests RBA will move too slowly

I have a piece in The Conversation on what we learned from Governor Lowe’s speech last night about its prospective approach to QE.

As I note in the article, the risk now is that the RBA repeats the US Fed’s mistakes by moving too slowly.

Having sat on its hands for three years while inflation and inflation expectations collapsed, the RBA Governor made this suggestion without any hint of irony:

I think we can safely say that this risk has been minimised in Australia at least! Incredibly, we still get headlines like this: