The Reserve Bank of Australia has abandoned its yield curve target, a few days after bond yields broke free and surged above the central bank’s goal.

Investors had judged – correctly – that higher rates were on the horizon. As yields on government debt climbed, the RBA chose not to intervene to defend its target of 10 basis points for debt maturing in April 2024. Two-year yields are now at 0.65%, though bonds at higher maturities have seen their yields climb less.

Policy-makers considered