The following are some of the issues discussed this morning in a Webinar held by the Reserve Bank with economists relating to yesterday’s Monetary Policy Committee statement and interest rate decision.

The Reserve Bank explained that publishing the 3% inflation target scenario was meant to improve transparency, not to guide expectations. It showed that a lower target could actually lead to earlier rate cuts. Some economists questioned the model’s short inflation-adjustment timeframe, but the Bank cited past evidence to defend its assumptions. While a further 0.25% rate cut is possible, uncertainty remains about future policy direction, especially since any formal shift in the inflation target is unlikely before 2027.