RBNZ's Conway: Further rate cuts possible if inflation keeps easing

Latest Flash PMI® data signalled a further modest increase in overall private sector business activity across Japan during July. However, this masked divergent underlying trends, ...

I’d like to begin by acknowledging the Traditional Custodians of the land on which we meet and pay my respects to Elders past and present. It’s an honour to join you today at the Anika Foundation fundraising lunch. The Foundation supports vital work on youth mental health research, awareness and education, in which I have a strong personal interest. I’m proud to uphold the tradition of the Reserve Bank Governor speaking at this event to support an organisation that is making a real difference. My remarks today centre on the dual objectives of monetary policy: ‘price stability’, which means maintaining low and stable inflation; and full employment, which I will talk about in more detail later.1 I’ll explore how these aims have shaped the Monetary Policy Board’s strategy in recent years.2 As part of that, I will reflect on the relationship between the labour market and inflation over that time, and how conditions in the labour market have evolved to the present day. Now is a good time to revisit these subjects, following the agreement two weeks ago of an updated Statement on the Conduct of Monetary Policy, which sets out the common understanding of Government and the Board on key elements of the monetary policy framework. But before I turn to that, I’ll start with an update on recent monetary policy settings. RESERVE BANK OF AUSTRALIA GOV BULLOCK: MEASURED, GRADUAL APPROACH TO MONETARY POLICY EASING IS APPROPRIATE LABOUR MARKET HAS EASED ONLY GRADUALLY, UNEMPLOYMENT RATE RELATIVELY LOW RISE IN UNEMPLOYMENT IN JUNE WAS IN LINE WITH OUR FORECASTS, NOT A "SHOCK" JUNE DATA SUGGESTS…