RBNZ’s Hawkesby: High, sticky core inflation leaves little room for error

  • Need to take seriously that some inflation expectation measures have ticked up
  • New Zealand needs a period of very subdued spending
  • Vast majority of borrowers able to services their debt at these interest rate levels

The RBNZ is striking a distinctively different tune from other central bankers lately. That’s a sign of divergence and sets up for NZ rates to be higher than almost anywhere else at this time next year. Then again, what else would you expect a guy with ‘hawk’ in his name to say.

This article was written by Adam Button at www.forexlive.com. Source