New Zealand inflation expectations data - do analysts exepct an RBNZ rate cut in response? Short answer ....no.
Here's a couple of reactions to the New Zealand inflation expectations data earlier:
Westpac:
- Despite low current inflation, the details of the survey don't suggest that respondents see a case for lower interest rates
- Monetary conditions are already perceived to be very loose, and GDP growth forecasts for the next two years were revised up slightly
- On average, short-term interest rates are expected to be unchanged over the next year
- The separate survey of household expectations produced a similar result on the inflation front, with expectations for the year ahead falling from 3.1% to 2.6%
- Household expectations of inflation have been persistently above the inflation target for a long time, and the RBNZ will likely be pleased with how these have moderated in recent quarters.
ASB:
- The fall in 2-year expectation was more than expected
- "Slightly increases" the near-term risk of an RBNZ cut - but their call is still that RBNZ will leave rates on hold for the foreseaable future
- The next CPI reading is in April - will be a key event for the RBNZ
- "With medium-term inflation expectations currently below the mid-point of the RBNZ's target band, the RBNZ is likely to become more sensitive to any further downside surprises in inflation and inflation indicators"
