Analysts at Goldman Sachs point out that they maintain their forecast of a rate hike of 50 basis points by the Reserve Bank of New Zealand next week, despite a modest easing of third-quarter inflation expectations.
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“The RBNZ survey of inflation expectations for the third quarter of 2022 showed a modest relaxation of expectations both on the 2-year (-20 basis points to 3.1%) and 5-year (-10 basis points to 2.3%) horizons, although short-term expectations remain elevated in level terms.”
“Looking through the volatility, we see that medium-long term expectations remain well anchored around the midpoint of the RBNZ’s 1-3% target rangewhich should provide the RBNZ with some relief given concerns about a de-anchoring of inflation expectations given current high inflation.”
“we continue expecting the RBNZ to rise 50 basis points to 3% at the August meeting.
Source: Fx Street
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