### POV: Is the RBNZ Gov. on the way to........>

RBNZ: ### POV: Is the RBNZ Gov. on the way to prepping markets for a lower for

longer scenario?

- On Thursday RBNZ Gov. Orr noted that the RBNZ "expects very benign inflation

going forwards." Orr went on to state that "what matters is the confidence &

expectation that we are aiming for the midpoint of 2% all the time."

- The RBNZ moved to a dual-mandate in March, which requires monetary policy to

support maximum levels of sustainable employment. While the inclusion of the

objective warrants attention, it doesn't displace the importance of the

inflation mandate.

- Markets are pricing a ~80% chance of a rate hike over the next 12 months at

the start of biz on Friday, unch. from yesterday. The CPI data released in lieu

of Orr's statement was slightly stronger than exp., so the question must be

asked whether Orr used the address to set out a stall re: tempering rate hike

expectations? It's unlikely as he pointed to inflation exp.; for reference the

RBNZ's survey of inflation expectations revealed a 1.90% median over a 1-year

horizon & a 2.10% median over a 2-year horizon in Q1.