The financial markets need to wake up to the fact that there is going to be fewer interest rate changes than in the past and more policy inertia. This is very much a global development, but the trend is more acute in Australia and New Zealand. The lower neutral interest rate means that the plausible band that interest rates can move within is smaller. And the greater focus on financial stability means that band may be even smaller in Australia and New Zealand than elsewhere. In other words, monetary policy will become more boring.
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