00:00So price increases have slowed and it's fairly broadly based and this is very good news.
00:07The Board's strategy over quite some time has been to bring inflation down while avoiding
00:12a sharp rise in unemployment.
00:14This is consistent with our dual mandate of price stability and full employment.
00:20I know this period of relatively high interest rates has been and continues to be challenging
00:25for many households and businesses but it was essential we brought inflation down because
00:30inflation hurts everyone.
00:33The strategy that we took to achieve this was different to that of some other central
00:37banks who took rates much higher than we did.
00:41The Board accepted the trade off that leaving the cash rate where it was would bring inflation
00:45down more gradually but without a big increase in unemployment.
00:49A sharp rise in unemployment would have been very costly for families and for the Australian
00:54economy.
00:56Anyone who has experienced unemployment knows the profound impact that it has on your
01:00life and those that depend on you.
01:02So the cautious approach we have taken has got us to this point where inflation is now
01:08below 3% and employment is holding up.
01:13But now we've got inflation down we must keep it there while trying to maintain a healthy jobs
01:18market.
01:20So there's now a new set of challenges facing the economy but with inflation declining and
01:26the unemployment rate relatively low we're well positioned to deal with them.
01:30The Board remains prepared to take further action if that is required.
01:35Now since our last meeting global economic and policy uncertainty has increased substantially
01:41following tariff announcements by the US administration, the response of its trading partners and subsequent
01:47changes to the policies including various bilateral agreements and deals.
01:52It's been a complete roller coaster I'd have to say.
01:56How the tariffs will affect the global economy are going to depend on a few things.
02:01Where tariffs will settle following negotiations between the United States and its major trading
02:06partners.
02:07How the other trading partners respond.
02:10The extent to which global supply chains are disrupted by the increased barriers to trade.
02:15The degree to which trade can be diverted.
02:18And the impact of uncertainty on business investment and household spending.
02:22One thing to keep in mind we have made the judgement that global trade developments will overall
02:27be disinflationary for Australia.
02:30However there is a risk to inflation on the other side.
02:33The trade policies could lead to supply chain issues which could raise prices for some imports
02:39much as we saw during the pandemic.
02:41And so we'll also need to be alert to such upside risks.
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