Meanwhile, the Reserve Bank eased monetary policy from late 2011 in response to the prevailing weaker economic conditions in Australia. However, from around 2016, the Bank was balancing the case for a faster return of inflation to the target range by lowering the cash rate further, against the medium-term risks associated with an increase in what were already high levels of household debt.
[6] The Board’s decisions sought to limit the buildup of financial imbalances that can be a source of instability down the track. Over time, however, the evidence shifted. It became clearer that, even with the easing in monetary policy that had occurred, there was still spare capacity in the economy, which was weighing on wages growth and inflation.