Dovish Jan for the Bank

Reserve Bank statement is out for January.  They seem more negative on the world and feel inflation is more “comfortably” in the band.

If we want to know when they are going to move rates we have to keep an eye on:

  1. Monetary aggregates (for household debt accumulation),
  2. Labour market,
  3. Global growth.

Rates Blog also comments here.  Personally I’m more positive on both the world and near term New Zealand economic activity – and if the data shows this I would expect the Bank to move more quickly.

And also, what the hell – the 90 day bill rate is around 2.8%, inflation is around 2%, we are talking a real rate of 0.8% with expected real growth of say 2.5%.  We are in very very stimulatory territory here.

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