New Zealand Q2 inflation expectations rising
New Zealand monetary conditions survey from the RBNZ
Inflation expectations for 1 year out rose to 1.87% (from 1.73%)
- for 2 years out rose to 2.05% (from 1.89%)
Rising inflation expectations were expected, given capacity constraints, already higher headline inflation and business surveys showing higher cost and price expectations.
The level of inflation expectations shown in the Bank's survey are not worrying compared to the target band and are thus consistent with the OCR remaining on hold.