within our 2 – 3 per cent target range. the word ‘ sustainably ’ is important because it recognises that we need to look through temporary factors that influence the headline inflation rate from time to time. indeed, over the past year, part of the decline in headline inflation has been due to temporary factors such as electricity rebates and declining fuel prices. while these temporary factors have undoubtedly helped many australians, our approach is to look through them to some extent to better understand where inflation will settle in the medium term. graph 1 measures of inflation * % % headline ( year - ended ) trimmed mean * * ( year - ended ) trimmed mean * * ( quarterly ) - 2 - 2 * adjusted for the tax changes of 1999 – 2000. * * excludes deposit & loan facilities prior to the september quarter of 2011. sources : abs ; rba. the best way to do this is to look at underlying inflation. the measure we typically look at for this is trimmed mean inflation and by this measure, inflation was still too high at 3½ per cent over the year to the september quarter. while this is a welcome decline from 5. 1 per cent a year earlier, it is consistent with a situation in which the overall level of demand for goods and services in the australian economy has been outstripping its supply capacity for some time. we have maintained the cash rate at its current level of 4. 35 per cent for a little over a year now. this is 4. 25 percentage points above its emergency low level of 0. 1 per cent at the height of the pandemic. at this current level, we are of the view that monetary policy is restrictive. the effect of this is most evident in the household sector, with very weak growth in consumption, a decline in per capita consumption and very low dwelling investment. monetary policy settings will nevertheless need to remain restrictive until the reserve bank board is confident that inflation is on track to return sustainably within the target range and approach its midpoint of 2. 5 per cent. our forecasts published in the november statement on monetary policy suggest that a sustainable return to target will occur in 2026. elevated inflation indicates that the level of demand in the economy is above the ability of the economy to supply the goods and services demanded. but the evidence suggests that this gap is narrowing ( graph 2 ). one reason for this is that the rate of growth in demand has been quite subdued. the subdued rate of gdp growth, in turn, reflects

lender's own loan at adverse terms for the borrower. in seeking information and opinion about these four issues, the board determined that additional problems needed to be addressed as well, and for all loans, not just higher - priced loans. among the practices addressed by our proposal is the use of yield spread premiums ( ysps ). 6 many consumers use mortgage brokers to guide them through a complex process and shop for the best deal. unfortunately, consumers may believe that the broker has a responsibility to get them that best deal, which is not necessarily the case. in fact, the design of ysps may provide the broker a financial incentive to offer a loan with a higher rate. consumers who do not understand this point may not shop to their best advantage. therefore, we would prohibit a lender, for both prime and subprime loans, from paying a broker an amount greater than the consumer agrees to in advance. brokers would also have to disclose their potential conflict of interest. the combination of stricter regulation and better disclosure will not solve all the problems. we do believe, however, that this proposal will give consumers much better information and raise their awareness of brokers'potential conflict of interest while reducing a broker's incentive to steer a consumer to a higher rate. to protect consumers and promote competition, our proposal would also ban seven specific advertising practices deemed unfair or deceptive. under our rules, for example, mortgage originators would not be allowed to advertise a mortgage as having a " fixed " rate unless the advertisement also states clearly how long the rate or payment is fixed, and they could not advertise loans in one language but have important consumer disclosures in another. the proposal would also require that consumers receive loan - specific truth in lending act disclosures early in the application process, when they can use the information to shop more effectively. the proposal also addresses certain practices in loan servicing that can cause problems for consumers, such as delays in posting payments to a consumer's account, and it acts to prohibit coercion of appraisers by lenders or brokers. we believe these proposed rules will help protect mortgage borrowers from unfair and deceptive practices. at the same time, we did not want to create rules that were so openended or costly to administer that responsible lenders would pull out of the subprime market. so, our proposal is designed to protect consumers without shutting off access to responsible a ysp is