According to the latest RBNZ Survey of Expectations, the one-year-out inflation was relatively unchanged at 4.86% in Q3, down from Q2’s 4.88%. Expectations were still much higher than Q1’s 4.4% and Q4’s 3.7%.
However, two-year-out inflation expectation has fallen significantly to 3.07% in Q3, down from Q2’s 3.29%. That’s already below Q1’s 3.27% but still above Q4’s 2.96%.
Still, the most watched 2 year expectation sit above RBNZ’s target range. There is no change in market expectation that RBNZ would deliver another 50bps rate hike on August 17.
