Nick Tuffley: Why did ASB and RBNZ change their mind about rate cuts?
The Reserve Bank surprised the market on Wednesday by dropping hints it was open to cutting rates sooner than planned, due to signs the economy was getting too weak.
While the tone shift was unexpected, the central bank was reacting to the same data which had caused ASB’s economics team to change their own interest rate forecast the week prior.
Nick Tuffley, the retail bank’s chief economist, said economic data was sending very different signals in July than it had been prior to the RBNZ’s meeting in May.
Monetary policymakers had then been facing consecutive inflation data releases which…
The skinny
The skinny isn't ready yet — notes appear once the transcript is processed.