{"id":864674,"date":"2025-07-24T03:24:11","date_gmt":"2025-07-24T08:24:11","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/07\/24\/inflation-increase-expected-but-within-reserve-banks-target-band\/"},"modified":"2025-07-24T03:24:11","modified_gmt":"2025-07-24T08:24:11","slug":"inflation-increase-expected-but-within-reserve-banks-target-band","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/07\/24\/inflation-increase-expected-but-within-reserve-banks-target-band\/","title":{"rendered":"Inflation increase expected, but within Reserve Bank’s target band"},"content":{"rendered":"
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\nThe survey did not change ASB’s view of a 25 basis point cut to the official cash rate (OCR) later this month. <\/span>
\nPhoto: RNZ<\/span><\/span>\n<\/p>\n<\/div>\n

Inflation expectations have ticked up on a “Trump bump” but remain within the Reserve Bank’s (RBNZ) one to three percent target band.<\/p>\n

The RBNZ’s survey of expectations showed the closely-followed two-year-ahead inflation expectations increasing from 2.06 percent to 2.29 percent.<\/p>\n

The survey had 41 responses from business leaders and professional forecasters.<\/p>\n

ASB senior economist Mark Smith said the RBNZ would be “somewhat wary” as inflation ticked up<\/a> recently, and noted recent tariff headlines and concerns it may feed through into higher consumer prices “have not helped either”.<\/p>\n

However, he said the survey did not change ASB’s view of a 25 basis point cut to the official cash rate (OCR) later this month.<\/p>\n

“We still expect a 25bp OCR cut later this month and a 2.75 percent OCR endpoint, but this is conditional on the expected mid-2025 lift in inflation proving to be transitory,” Smith said.<\/p>\n

“The risk is that concerns over inflation see the RBNZ pare back monetary policy easing,” he said.<\/p>\n

Westpac senior economist Satish Ranchhod said the inflation expectations were “well within the RBNZ’s comfort zone”.<\/p>\n

“Even so, today’s data is a timely reminder of the lingering upside risks for inflation,” he said.<\/p>\n

“The rise in the usually stable 2-year ahead measure was large compared to history.<\/p>\n

“Upside risks for inflation were also evident in Stats NZ’s monthly prices update earlier this week, which showed continued firm price pressures<\/a> for items like food, transport and electricity, as well as a worrying surge in coffee prices,” Ranchhod said.<\/p>\n

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Margarete Schroeder
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Navigation for News Categories The survey did not change ASB’s view of a 25 basis point cut to the official cash rate (OCR) later this month. Photo: RNZ Inflation expectations have ticked up on a “Trump bump” but remain within the Reserve Bank’s (RBNZ) one to three percent target band. The RBNZ’s survey of expectations<\/p>\n","protected":false},"author":1,"featured_media":864675,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25663,23782],"tags":[5625,11748],"class_list":{"0":"post-864674","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-increase","8":"category-inflation","9":"tag-increase","10":"tag-inflation"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/864674","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=864674"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/864674\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/864675"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=864674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=864674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=864674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}