August 17, 2022 03:20 GMT
RBNZ Governor Orr notes that the neutral rate is a great unknown which needs to be under constant review.
- Flagging demographic shifts, various factors putting upward pressure on the neutral rate, which may mean the Bank is not be doing as much work as previously assumed when it comes to providing headwinds for the economy.
- Orr notes that the RBNZ didn’t get close to a 75bp rate hike when questioned on the matter. References other central banks starting from lower levels and later than the RBNZ, as was noted in the accounts of the meeting in an inenrational context re: the size of rate hikes.