However, as Emeritus Professor Blanchard, one of the economists involved in the debate, has stated it is “only half time,” the future course of inflation is still uncertain and the debate has not been settled yet.
The government bond market is a key market for the Australian financial system, because government bonds provide the pricing benchmark for many financial assets. Our approach here is similar in concept to our longstanding approach to the foreign exchange market, where we have been prepared to support smooth market functioning when liquidity conditions are highly stressed.