RBNZ: Inflation expectations key to rate-hike pace

Bloomberg

New Zealand’s central bank will be closely watching inflation expectations to determine whether it needs to raise interest rates at a faster pace, Assistant Governor Christian Hawkesby said.
“Inflation expectations are going to be absolutely key for us,” Hawkesby said in an interview with Bloomberg Television in Wellington. “There are things that could make us go faster, and I think inflation expectations is one.”
The Reserve Bank this week lifted its official cash rate for a second time, to 0.75%, and projected a tightening cycle that will take the benchmark to 2.5% over the next two years. Two-year inflation expectations have jumped to 2.96%, the highest in a decade, while headline inflation is running at 4.9% and forecast to accelerate towards 6% in coming months.
New Zealand’s central bank is tasked with keeping inflation around the midpoint of a 1-3% target range over the medium term.