RBNZ rate hike news conference, says still forecasting a recession 9 to 12 months period

RBNZ Governor Orr leading the press confernce:

• too early to determine impact of Cyclone Gabrielle
• said prices for some goods are likely to spike in the weeks ahead
• still forecasting a recession 9 to 12 months period
• Demand needs to slow significantly
• more savings will relieve inflationary pressures
• increased deposit rates will promote savings
• very little discussion of a 25bp rate hike, most focus was on 50bp

Reserve Bank of New Zealand Chief Economist Conway says the economy is severely capacity constrained:

• the impact of the cyclone has boosted the demand for labour
• possibility that the build-back from cyclone damage boosts inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term

Earlier:

• RBNZ hikes cash rate by 50bp, as widely expected

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