RBNZ hikes OCR by 50bps to 3.50%, as expected, while it stated that the Committee agreed it is appropriate to continue to tighten policy and members agreed monetary conditions needed to continue to tighten until inflation was back in target range
Important
SourceNewsquawk
SectionRBNZ
Says:
- Core consumer inflation is too high and labour resources are scarce.
- Level of domestic spending remained resilient to date.
Minutes:
- Committee considered whether to increase the OCR by 50bps or 75bps.
- Members agreed the OCR needed to reach a level where the Committee could be confident it as sufficient to maintain expectations of low inflation in the longer-term and bring consumer inflation back to the target range.
- Some members highlighted that a larger increase in the OCR now would reduce the likelihood of a higher peak in the OCR being required.
- New Zealand productive capacity is still being constrained by labour shortages and wage pressures are heightened.