Appropriate for rates to look more at output, labour and financial stability relative to inflation
- Persistently low inflation has prompted central bank to think about whether it needs to ‘tweak’ its approach to monetary policy
- NZ non-traded inflation is seen picking up from late 2018 in response to increasing capacity pressures in context of Nov MPS, if this does not eventuate bank would have to consider further easing of policy
- Should be cautious about making any recommendations for change in current framework;
- With long-term inflation expectations anchored at 2%, there remains broad confidence in the effectiveness of the current framework.
- More recently we have been assuming greater persistence in low global inflation and this is contributing to our current flat track for future OCR levels.
Kiwi yoyo-ing as the speech get read between 0.8655 and 0.6865 , then moves up to 0.6885
Here’s the link