“The Committee was confident in the level of restriction of interest rates at the current timeReserve Bank of New Zealand (RBNZ) Governor Adrian Orr told the New Zealand Government Finance and Expenditure Committee late on Wednesday.
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Interest rates are well above what we would consider neutral and are limiting spending and investment.
There were indicators that consumer spending and aggregate demand as a whole were easing and in some places they were falling in real terms.
The committee trusts that monetary policy will be restrictive and fulfill your mission.
The central bank never rules out the need to change its mind.
There was a risk that the central bank would have to raise rates due to the stickiness of inflation expectations and the continuation of public spending.
There were also downside risks, such as a weaker-than-expected Gross Domestic Product and a larger-than-expected impact on households from moving to higher mortgage rates.
Source: Fx Street
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