I’m not sure they can endorse something that hasn’t happened yet (tin hats, have at it), but the headline on the release from NZIER’s Monetary Policy Shadow Board says: Shadow Board endorses raising interest rates – but it’s a close call
NZIER’s Monetary Policy Shadow Board recommends a hike – “but with caution”
- 55% are in favour
- 46% against
- So it’s a very close call (and, yes I know 55+46 doesn’t equal 100, but thems the numbers quoted. Besides it’s the southern hemisphere, K?)
- “Stronger domestic demand will push inflation higher over the next year.” said Dr Kirdan Lees, Principal Economist at NZIER. “But right now the kiwi dollar is soaring just when commodity prices are moving backwards and taking the wind out of the economy.”
- “Even domestic economic indicators such as those in NZIER’s Quarterly Survey of Business Opinion have moderated and the inflation picture is much weaker than predicted in the Reserve Bank’s June Monetary Policy Statement.”
- “The Reserve Bank is in a tight spot and needs to be careful. Raising interest rates on Thursday shows commitment to the messaging from its June Monetary Policy Statement but could take the currency even higher. Taking a breather could see fixed mortgage rates fall, stoking the housing market – unless financial markets can be convinced further interest rate hikes are just around the corner.”