The inflation target is symmetric, which means that the Bank is equally concerned about inflation rising above or falling below the 2 per cent target. The Bank continues to use core inflation as an operational guide for its monetary policy because it is an effective indicator of the underlying trend in CPI inflation.
There are a few problems with that story, not least of which is that saving rates have tended to fall, rather than rise, in the past decade at the time when boomers were supposed to be seeking rapidly to build their net worth.4 But there is no doubt that the baby boom is an important demographic phenomenon.