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Sticky Household Inflation Expectations Turn Down

NEW ZEALAND

Household inflation expectations for Q3 as measured by the RBNZ eased significantly with the 1-yr ahead median moderating to 5% from 7%, the peak, and the 2-year to 3.5% from 5%. Recent research from the RBNZ found that both business and household inflation expectations are useful in projecting the CPI. It found that the 1-year mean household measure was the best and this series eased to 6% in Q3 from 7.4%. It has been sticky until the latest data point, which should reassure the RBNZ.


NZ CPI y/y% vs inflation expectations

Source: MNI - Market News/Refinitiv/RBNZ

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