/ uploads / p120718. pdf > see isda ( 2018 ), ‘ isda publishes final results of benchmark fallbacks consultation ’, press release, 20 december. available at : < https : / / www. isda. org / 2018 / 12 / 20 / isda - publishes - final - results - of - benchmark - fallback - consultation / >. see fsb ( 2019 ), ‘ fsb letter to isda about derivative contract robustness to risks of interest rate benchmark discontinuation ’, 15 march. available at : < http : / / www. fsb. org / 2019 / 03 / fsb - letter - to - isda - about - derivative - contractrobustness - to - risks - of - interest - rate - benchmark - discontinuation / >. also see schooling latter e, ‘ libor transition and contractual fallbacks ’, speech at the isda annual legal forum, 28 january. available at : < https : / / www. fca. org. uk / news / speeches / libor - transition - and - contractual - fallbacks > see arrc ( 2019 ), ‘ fallback contract language ’. available at : < https : / / www. newyorkfed. org / arrc / fallbacks - contractlanguage > see international accounting standards board ( 2019 ), ‘ ibor reform and its effects on financial reporting ’, available at : < https : / / www. ifrs. org / projects / work - plan / ibor - reform - and - the - effects - on - financial - reporting / # about > see bcbs and iosco ( 2019 ), ‘ bcbs / iosco statement on the final implementation phases of the margin requirements for non - centrally cleared derivatives ’, press release, 5 march. available at < https : / / www. bis. org / press / p190305a. htm > and < https : / / www. iosco. org / library / pubdocs / pdf / ioscopd624. pdf > for more details on recent benchmark developments in australia, see kent c ( 2019 ), ‘ bonds and benchmarks ’, speech at the kanganews dcm summit, sydney, 19 march. see european commission ( 2019 ), ‘ sustainable finance : commission welcomes agreement on a new generation of low - carbon benchmarks ’

to turn to the board ’ s monetary policy decisions over recent months. the board is committed to doing what is necessary to ensure that inflation returns to target over time. high inflation is a scourge. it damages our standard of living, creates additional uncertainty for households and businesses, erodes the value of people ’ s savings and adds to inequality. and without price stability, it is not possible to achieve a sustained period of low unemployment. it is important, therefore, that this current surge in inflation is only temporary and that we once again return to the 2 to 3 per cent range. the board is committed to the return of inflation to target. it is seeking to do this in a way that keeps the economy on an even keel ; it is possible to achieve this, but the path here is a narrow one and it is clouded in uncertainty. i would like to highlight three sources of this uncertainty. the first is the global economic environment. in the united states, the federal reserve has indicated that a period of tight monetary policy and below - trend growth will be required to get inflation under control. in europe, real incomes are suffering very big declines because of sharply higher energy costs, and this will weigh on spending and growth. and in china, the economy is being affected by the authorities ’ approach to covid, major stresses in its property industry and drought in parts of the country. some slowing in the global economy will help bring inflation down, but a sharp slowing would make the job of delivering a soft landing here in australia much harder. the second source of uncertainty is domestic in nature – and that is how inflation expectations and the inflation psychology in australia adjust to the period of high inflation. if workers and businesses come to expect higher inflation, and wages growth and price - setting behaviour adjusts accordingly, the task of navigating that narrow path will be very difficult, if not impossible. a shift higher in inflation expectations will require higher interest rates. in time that would mean a sharper slowing of the economy. it is in our national interest that we avoid this. the third source of uncertainty is how households respond to higher interest rates. interest rates are increasing for the first time in 12 years and they are rising quickly. the full effects of this are still to be felt. household budgets are also under pressure from higher inflation, and housing prices are declining after large gains r e s e r v e b a n k o f au s t r a l i a ( graph 8 )