from the general case for further monetary easing that i have already spoken about, there are a couple of other factors that have influenced the timing. the first is that over recent months we have learnt more about the pandemic and its economic impact. as the months have passed, it has become increasingly apparent that there will be longlasting effects, including high unemployment. while the outlook does remain uncertain, we do have a somewhat clearer picture of the future state of the labour market. a sharp bounce - back in jobs is unlikely and it will take time to return to where we were before the pandemic. we have responded to this clearer picture today. the second factor is that monetary easing is likely to get more traction today than it would have when widespread restrictions were in place. in earlier months, the usual transmission 3 / 5 bis central bankers'speeches mechanisms were not working as normal and the challenges facing the country were best addressed by other policy tools. however, as restrictions are eased and people have more opportunities to spend, our judgement is that further monetary easing now provides additional support to other policies, including the fiscal initiatives and the rba ’ s earlier monetary policy package. in reaching today ’ s decision, the board also considered the effects on medium - term financial and macro stability as well as the impact on savers. the board recognises that low rates can encourage some additional risk - taking, as investors search for yield. it also recognises that low deposit rates can create difficulties for some people. these issues will need to be closely watched over the months ahead. but the board judged that the bigger risk at the moment was the threat to our economy and to balance sheets from an extended period of high unemployment. today ’ s decision will lessen that risk. is the rba now financing the government? the answer is a simple no. today ’ s decision does not change the long - standing separation of monetary policy and fiscal financing in australia. the rba is not financing government spending. i want to highlight the important distinction between providing finance and affecting the cost of that finance. the rba is not providing finance to the government, but our actions are lowering the cost of government finance. i should point that our actions are also lowering the cost of finance for all other borrowers in australia, whether they are a household buying a home or a business wanting to expand. this lower cost of finance for everybody is supporting the recovery from the pandemic. it is important to point out that the

the second half of 1999. the question that remains unanswered - and troublesome - is whether this significant improvement in productivity growth, which has made the us economy one of the most competitive in the world today, is temporary or permanent. what is less often taken into account is that the us productivity boom of the 1990s has taken place against a background of very low inflation in the united states and rapidly decelerating inflation in almost every region of the world. through much of the 1990s, weak economic performance elsewhere in the world has held down commodity price inflation and strengthened the dollar. as a result of both productivity growth and the favorable world inflation environment, core consumer price inflation ( cpi ) - excluding the more volatile food and energy sectors - has been running about 2 % recently, down from 3 % in 1995. as measured by the personal consumption expenditures deflator ( pce ), core inflation is even more subdued, rising by only 1½ % a year over the past few years. as a central banker, however, i cannot help but register concerns about some recent developments. as the expansion has progressed, signs of imbalance or strain have begun to appear in the us economy, especially in relation to the world economy. commodity prices, for example - and not just oil prices - have increased rapidly in recent months, as world growth has bounced back sharply in 1999. for example, on a year - over - year basis, prices for crude materials, excluding food and energy, were up 15 % as of february. in addition, strong consumption growth in the united states has been fueled in part by an inexorable decline in the personal saving rate. as i have noted, however, these declines in personal saving rates may to some extent be due to technical measurement issues. moreover, the us current account deficit has also widened markedly over the past several years, with corresponding large surpluses in asia and europe. the outlook is for continued worsening in the deficit that had already reached a record last year, at about 4 % of gdp. history tells us that such imbalances can persist for some time, but increase in risk as they widen. history also tells us that current account imbalances eventually require macroeconomic adjustment - adjustment that is smoother and more orderly the earlier and more coordinated the policy response. while i am not one to second - guess the markets, i also believe that we in the united states must ask ourselves whether the surge in the stock market over the past several