RBNZ Governor Bremen says more risk on inflation to the upside and inflation is expected to increase considerably in the near-term
Says:
- Previous rate cuts are still providing some stimulus to the economy, and a swift resolution to the conflict is expected to yield stronger growth this year.
- RBNZ to ‘act decisively’ if core prices pick up.
Context
RBNZ Governor Bremen's comments highlight increasing concerns about inflation, suggesting the bank may need to adopt a more hawkish stance if core prices continue to rise. This signals that recent rate cuts are still supportive of the economy, but any signs of accelerating inflation could prompt a decisive policy response, impacting New Zealand's monetary outlook and the NZD generally. Watch for potential shifts in fixed income markets as traders adjust their expectations for future rate movements.
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