The headline inflation number for Q4 2023 is a welcome sight for the Reserve Bank of New Zealand:
But, as they say, the devil is in the details:
'Non-tradeable' inflation has come in at a whopping 5.9% y/y
- +1.1% q/q, way above expected at 0.8%
The RBNZ has basically zero control over tradeable inflation (more on this in the details at that post linked above). But non-tradeable inflation is something the Bank can address, using its (basically only) tool of monetary policy. High non-tradeable inflation argues for continued tight monetary policy.
NZD/USD popped higher:
