Glenn Stevens delivered today almost exactly in line with my expectations with one exception:
1) He reaffirmed the RBA's medium-term tightening bias with above-trend forecast GDP growth and their projection that CPI disinflation will cease and consumer prices will start accelerating again. Long story short, we are not going to get the benefit of a neutral cash rate for too long;
2) He went to great lengths to explain the role of monetary policy, the fact that it is a very blunt, singular instrument, and, crucially, works with long lags and must, therefore, be predicated on the Bank's base-case view of the future state of nature, rather than the past;
3) He highlighted that a single monetary policy setting is unlikely to suit all regions at any given point in time, although spent far less time on structural adjustment across the states than I was expecting to see in line with the recent Bulletin analysis (in fact, he ended up arguing that there was reasonable commonality in inflation outcomes, albeit perhaps less so in respect of unemployment).
