RBNZ governor Wheeler dropped hints that their will not be further rate cuts at the February meeting should the status quo remain intact. The following is a good insight for the market to chew on while there is a void between November's meeting and February 2017's.
Wheeler explained that the growth prospects look promising.
Further quotes:
- "Current policy should see inflation reach 2% target
- Monitor policy to remain accommodative
- Trend may finally be turning on NZ dollar
- Low point for CPI has probably passed
- Prospects good for strong growth over next 18 months
- House price inflation much higher than desirable
- US growth prospects positive for N.Z.
- Long-term inflation expectations remain well anchored
- Official cash rate projections highly conditional on assumptions around exchange rate, migration,, house price inflation
- Different outcomes from those assumed in November monetary policy statement could imply a different policy path
- In November monetary policy statement the bank assessed overall balance of risks to be on the downside
- Projected policy settings will help generate enough growth to have inflation settle near middle of target range.
NZD/USD is supported on the comments, but just 10 pips higher.
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