RBA - THE CONDUCT OF MONETARY POLICY IN CRISIS AND RECOVERY

Governor Steven's delivered a detailed speech yesterday on the operation of monetary policy and the factors that contributed to their dramatic actions of last year and earlier this year. If you want an education on the operation of monetary policy it's actually quite an informative listen ( I chose to listen to his speech rather than read it - a link to this feature is below) The answers to the questions after the speech are just as informative.

The papers and markets have gone into a bit of a spin as a result but personally I don't think he implied anything we didn't already know - that is that it's pretty certain that cash will be 3.75% by Christmas. What they do from Feb is still open to interpretation but you'd have to think there was a good chance we'll see a 4 in front of the cash rate in the new year.

You'll notice from the rate sheet yields have jumped a bit since yesterday. You may see them re-trace some of this exuberance next week.

This link is to listen to it the speech.

http://boardroom-pc.streamguys.us/files/RBA/RBA20091015_GS/