Inflation & Monetary Policy - Central banks have done a good job taming the great inflation of 2022 [1] - The primary concern should be the inflation trajectory, as it dictates the direction of interest rates [3][4] - Current policy is broadly in line with a neutral stance, with analysts suggesting a 7% nominal rate indicates neutral territory [14][15] - Uncertainty about the inflation trajectory persists due to past volatility [15] Inflation Target & Policy Revision - There's an opportunity for "opportunistic disinflation," using a low inflation environment to anchor inflation expectations [5][11] - The current inflation target range is considered too wide and high compared to peers, necessitating a revision [10] - The South African Reserve Bank is undergoing a review, with recommendations to lower the inflation target to 2-3% [6][8] - Lowering the inflation target could lead to lower nominal interest rates [14] Risks & Communication - Geopolitical shocks and policy decisions (tariffs) can impact the economic outlook [2] - Scenarios are useful for policymakers to communicate potential risks and future trajectories, but require careful communication to avoid public misinterpretation [16][17]