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Bullock doesn't think there's stagflation N By Nassim Khadem

The Reserve Bank's nightmare scenario is stagflation — a situation with stagnating growth and higher inflation at the same time.

Michele Bullock doesn't think we are there.

"I wouldn't call inflation of 3.5% and unemployment rate of 4.6%, stagflation," she said in response to a question from a reporter.

"That's a pretty good unemployment rate historically stagflation you typically associate with very high inflation and very high unemployment. And I don't think we have very high unemployment."

Ms Bullock says while the RBA has been out of its target band inflation rate for six years "we are aiming to get it back".