low inflation outcomes. the more flexible supply side means that employment growth can be stronger without fears of overheating. at the same time, the unemployment rate that would put upward pressure on inflation is also lower than it once was. as the evidence accumulated in support of these propositions, the outlook for monetary policy changed and the board lowered the cash rate in june and july. in making these decisions the board also recognised that the earlier concerns about the trajectory of household debt had lessened. the board has also paid attention to the shift in the outlook for monetary policy globally. these two recent reductions in the cash rate will support demand in the australian economy. so too will recent tax cuts, higher commodity prices, some stabilisation in the housing market, ongoing investment in infrastructure and a lift in resource sector investment. we also need to remember that the underlying foundations of the australian economy remain strong. it remains to be seen if future growth in demand will be sufficient to put pressure on the economy's supply capacity and lift inflation in a reasonable timeframe. it is certainly possible that this is the outcome. but if demand growth is not sufficient, the board is prepared to provide additional support by easing monetary policy further. however, as i have discussed on other occasions, other arms of public policy could also play a role in this scenario. whether or not further monetary easing is needed, it is reasonable to expect an extended period of low interest rates. on current projections, it will be some time before inflation is comfortably back within the target range. the board is strongly committed to making sure we get there and continuing to deliver an average rate of inflation of between 2 and 3 per cent. it is highly unlikely that we will be contemplating higher interest rates until we are confident that inflation will return to around the midpoint of the target range. thank you for listening. i look forward to answering your questions. https : / / www. rba. gov. au / speeches / 2019 / sp - gov - 2019 - 07 - 25. html 13 / 14 7 / 25 / 2019 inflation targeting and economic welfare | speeches | rba endnotes [ * ] i would like to thank ellis connolly for assistance in preparing these remarks. conceptually, it is possible to think of these structural factors as adding to global supply, so this third explanation could be seen as elaboration of the second explanation. these structural factors are also likely to be pushing down the equilibrium real rate of interest. simon j and m sutton (

each scheme, there are multiple cards with differing interchange fees, and market share tends to shift towards those cards with the higher fees. it ’ s an illustration of the the acquirer is the bank that services the merchant. the issuer is the bank that issued the credit card to the cardholder. in a typical credit card transaction, the acquiring bank pays an interchange fee to the issuer. principle that, in these rather unique conditions, competition for market share tends to push the average price up rather than down. what i ’ ve just set out is obviously not a complete description of the cards market. but i think it captures those features that are particularly distinctive, and which raise at least the potential for concerns about efficiency and the adequacy of competition. with that background, i ’ ll turn now to the rba ’ s involvement in card payments regulation. the origin of that involvement was the decision by the federal government, in 1997, to implement the wallis recommendations by giving regulatory oversight of the australian payments system to the rba. the act set up a payments system board of the reserve bank, with responsibility for payments - system efficiency and stability. among other things, the act gives the board the power to designate a payments system and, where a system has been designated, to set regulatory standards with respect to such things as fees and operating rules. the board ’ s first major study in this area was conducted jointly with the accc, and was released in october 2000. that study raised a number of concerns about market practices in the industry, particularly the setting of scheme interchange fees and a range of other matters related to competition and the efficiency of price signals. since industry attempts to address accc concerns about interchange fees had failed, and given that the payments system board had a clear mandate in this area, the board then moved into a process of reform, starting with the credit card schemes. after a period of consultation, the first package of credit card reforms was announced in august 2002. that package had three main elements, which were : a cost - based standard on interchange fees ; disallowance of no - surcharge rules ; and rules to expand access to the network. but the bank was always of the view that reform of the payments system needed to be holistic. so over the next few years, the reform process added a number of other elements, which covered both credit and debit cards. some of the key ones were : a restriction on the honour - all -