Purchases would still be conducted to maintain the target for the three-year bond, but additional purchases could occur further out the curve on a regular basis. This would have the effect of further lowering government bond rates at longer maturities. Very few financial instruments in Australia price off these yields.
The average rate of inflation since the mid 1990s in the US has been about one-third of what it was in the period 1970-85, while the volatility of inflation has fallen to about one-seventh of its previous value. Quite similar results have been observed in Australia. For the OECD group, the trend is similar though less pronounced.