RBNZ managing inflation expectations
Reserve Bank Governor Alan Bollard delivered an on-the-record speech last week as part of the Reserve Bank's campaign to manage inflation expectations through public communication rather than lifting interest rates says ASB Business Weekly.
J. P. Morgan Weekly Prospects says Bollard warned against households and businesses increasing margins and wages in response to the forthcoming GST hike.
"He said doing so would worsen inflation, forcing the Reserve Bank's policy tightening hand more than would otherwise be the case."
Westpac Weekly Commentary says the Reserve Bank's forecast for inflation to remain "comfortably inside the target band in the second half of our forecast horizon" is a conditional one, which relies on the Reserve Bank delivering the rate hikes they have projected.
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