RBNZ Plans to Return Cash Rate to Neutral Level of 2%: Orr

The transcript discusses the Kansas City Fed's symposium in Jackson Hole, focusing on market expectations for Fed Chair Powell's statement on bond tapering. It explores the global economic environment, emphasizing the need for monetary policy normalization. The conversation highlights the history of inflation targeting and the current credibility issues faced by central banks. Reflections on past policy mistakes and the least regrets framework are shared, along with the impact of exchange rates and economic pressures on policy decisions. Finally, future interest rate projections and the concept of a neutral rate are discussed.

How does the current economic environment compare to previous periods in terms of inflation and monetary policy?

In what ways can the exchange rate impact monetary policy decisions in small open economies?

What factors contribute to the decision-making process of central banks when considering interest rate hikes?