”You asked where do interest rates have to go? Look, last week we took a big step, we raised our policy interest rate by 100 basis points. That got us into what we call the long run neutral range... We are deliberately front-loading our interest rate response. We want to get ahead of this. The best chance of getting that soft recovery is to front-load the policy response.
That does argue for increasing the policy rate again, probably something around the top of that 2 to 3 per cent range, or a little bit over and doing that pretty quickly. ”