The RBNZ has some things of interest in their Monetary Policy Statement as they held rates on the day of NZ’s August Lockdown.
Inflation Targeting
So, when it comes to interest rates, their big focus has always been obviously CPI or inflation, right? Midpoint of 2% is their target. Now it’s already north of 3%. So there is some pressure on them. And without this lockdown, could we have seen an increase in interest rates? They are alluding to that basically however commentary did mention some of this inflation being of a transitory nature. Due to global supply squeezes.
Wage inflation creeps up dramatically compared to previous upticks.
Opportunity to fix long
Longer term fixed rates had started its move north a few months ago. Shorter term rates are now moving. Perhaps longer terms are worth considering especially as they are below historical long term averages.
