Speech by Carolyn Hewson AO - Monetary Policy Board Member - 27 May 2026

Why It Matters

The RBA’s transparent, judgment‑driven approach to balancing inflation and employment strengthens economic stability, directly influencing business investment, household finances, and Australia’s long‑term prosperity.

Key Takeaways

• RBA’s dual mandate balances low inflation with full employment.
• Monetary decisions rely on extensive market data and community insights.
• Financial conditions, not just cash rates, drive policy transmission.
• Judgment, not models alone, guides RBA actions amid uncertainty.
• Public purpose and institutional independence underpin RBA’s credibility.

Summary

Carolyn Hewson, a Reserve Bank of Australia monetary‑policy board member, delivered the 2026 Joseph Fischer public lecture, using Fischer’s legacy to explore how economic thinking serves the public good and shapes central‑bank decision‑making. She framed the discussion around the RBA’s dual mandate—maintaining low, stable inflation while supporting high employment—and argued that these goals are complementary, not competing, over the long run.

Hewson detailed the board’s rigorous process: extensive briefings from senior staff, deep analysis of short‑term rates, yield‑curve dynamics, corporate bond spreads, equity markets, exchange‑rate movements, and credit conditions. She highlighted the importance of community liaison, noting that monthly conversations with businesses, unions and regional groups provide real‑world checks on model‑driven forecasts. Historical anecdotes—from 1980s financial deregulation to the Global Financial Crisis—illustrated how market structures and judgment evolve under uncertainty.

Notable examples included the briefings by Dr. Sarah Hunter and Dr. Christopher Kent, the use of neutral‑exchange‑rate concepts, and her own experience chairing a risk committee during the crisis. Hewson repeatedly invoked Fischer’s belief that economics must be rigorous, widely shared, and tested in practice, positioning the RBA’s independence as a trust‑building mechanism rooted in public purpose.

The speech underscores that effective monetary policy depends on disciplined data analysis, broad stakeholder input, and seasoned judgment. For businesses and households, this translates into more predictable financing conditions, stable purchasing power and confidence that policy decisions prioritize long‑term societal welfare over short‑term gains.

Original Description

In this speech, Monetary Policy Board member Carolyn Hewson AO reflects on the practical application of economic thinking, leadership, and public service in a complex world.