It seems to me that the RBA folk have no idea of basic control theory. In layman's terms, if you're screaming downhill you need to hit the brakes before you get to the bottom.
A simple two variable (stimulus and output) closed loop feedback control system has a loosely known response function - how the output responds to the stimulus. The control function is designed by the engineer to give the best fit possible to the desired output function. In engineer speak, if your response function (loosely speaking cash rate setting input, inflation rate output) has a delay element (lag), you need to add some differential gain (i.e. time derivative of the output function) to your control function (inflation data in, cash rate setting out) to adequately respond to external perturbations of the output variable without overshoot and oscillation.
RBA Gov'nr was unable to give a definitive answer on whether inflation had to be within the target band before commencing an easing cycle. Seriously??? Have they not learned from every other cycle where they waited for the genie to exit the bottle before jamming in the cork?
