The Reserve Bank has acknowledged that more people are losing faith in its ability to control inflation in the next 12 months.
It says it is taking the matter seriously because "trust" plays an important role in the bank's ability to manage people's inflation expectations, which feed back into the bank's ability to control inflation.
RBA deputy governor Andrew Hauser talked about it in a speech last week.
The ABC covered the speech here, with a focus on its main message.
But it is worth revisiting elements of the speech where Mr Hauser talked about the RBA's "values" and "full employment", for more interrogation.
Because they begged a question: do Australians know what the bank actually means when it talks about "full employment"?
And does the bank's modern usage of the term make people have more, or less, trust in its inflation-fighting approach and its ability to hit its inflation target?
Mr Hauser said the full impact of a rate hike depends on whether people "trust" the bank to do what is necessary to meet its inflation target.
By that he meant, if people believe the RBA will keep lifting rates until inflation comes down, that "belief" will influence their spending decisions, which will ultimately help the bank to control inflation.
