RBNZ Governor Breman says fundamentals consistent with slower inflation; Not at all comfortable with having inflation at 3.1%
Importance
Level 1
- Wage growth is modest, have some spare capacity.
- If the outlook for inflation changes, the committee will adjust policy stance to ensure inflation returns to the target.
- There are uncertainties about how firms adjust their pricing behaviour as the economy recovers.
- If the RBNZ see pricing behaviours adjust, a much stronger recovery that can sustain higher interest rates, the RBNZ would tighten earlier.
- Rise in January food prices could be related to weather.
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