- As an activist policymaker, I chose 50 bps now, along with continued restrictiveness in the future, and a higher long-term bank rate to “cut through the noise”
- Notwithstanding the 50 bps cut now, structural impediments to achieve inflation target on a sustained basis are not yet fully purged
- Current and likely continued weak demand conditions will lead to further loosening of the labour market
- I am at the higher end of the 3% to 3.50% range of estimate for long run equilibrium on the bank rate
- Need to maintain policy rate discipline and restrictiveness even after this immediate voting decision
Mann is trying to clarify that even if she did side with a 50 bps move last week here, she’s still somewhat hawkish about policy in the bigger picture. It’s a tough sell in my view. Actions speak louder than words. It feels rather convoluted at best when trying to make sense of her remarks above.
This article was written by Justin Low at www.forexlive.com.
