Central bankers are trained and armed to fight inflation. However, the enemy, if not routed, seems to have taken to the hills. Headline consumer price inflation has averaged 1 per cent over the past five years, right at the bottom of the Reserve Bank's target band. And with a pretty flat yield curve — 10-year government stock is trading at a yield of around 2.8 per cent — the financial markets seem sanguine about the inflation outlook too. In a speech this week, acting governor Grant Spencer acknowledged that at least since the global financial crisis, the bank's economic models, grounded in past experience, keep ... (full story)