RBNZ meet this week. No hike coming, but this is not a preview.

Author: Eamonn Sheridan | Category: Central Banks

This from the New Zealand Institute of Economic Research Monetary Policy Shadow Board. The board "show where they think interest rates should be, not what they believe will happen".

So, its normative, K?

Moving on, here's what the Shadow's say (in brief): 

  • The Shadow Board again recommends the Reserve Bank leave the Official Cash Rate on hold ... with a tightening bias.
  • "New Zealand economic outlook remains positive ... annual inflation lifted to 2.2 percent for the year to March. While higher food and fuel prices have largely driven the recent pick-up in inflation, and may be transitory only, there are also signs that underlying inflation is continuing to lift." said Christina Leung, Senior Economist at NZIER.
  • "However, any further lift in inflation is expected to be gradual, and downside risks remain due to heightened geopolitical risks from offshore. These factors suggest that while interest rates should go up, for now there is little urgency. NZIER continues to expect the Reserve Bank to begin lifting the OCR from the middle of 2018."
The shadows offer advice to the RBNZ, so its not a preview as such (bolding mine)
  • NZIER's Monetary Policy Shadow Board ... participants share out 100 points across possible interest rates to indicate what they believe is the most appropriate Official Cash Rate setting for the economy. Combined, these scores form a Shadow Board view ahead of each monetary policy decision.
If you would like a preview, check this out: The week ahead in Asia - here is the big focus (spoiler: RBNZ)