RBNZ: Concerned about a continued global slowdown rather than a faster recovery

Reuters is out with the key headlines from the RBNZ May monetary policy statement and the minutes of the meeting:

Minutes – Highlights

Committee reached decision to cut by consensus

Committee reached a consensus that a lower path for the OCR over the projection period was appropriate

Members agreed given weaker domestic spending, and projected growth and employment headwinds, there was a need for further monetary stimulus.

Key downside risk was a larger than anticipated slowdown in global economic growth, particularly in China and Australia.

On balance, the committee was more concerned about a continued global slowdown rather than a faster recovery.

Committee noted upside and downside risks to the investment outlook.

Was agreed that the outlook for employment growth is more subdued and capacity  pressure is expected to ease slightly in 2019.

Committee agreed that overall risks to the inflation projection were balanced.

Was agreed that inflation expectations remain well anchored at the mid-point of the target range.

Committee noted the limited pass-through of the nominal wage growth to consumer price inflation.

Statement – Highlights:

RBNZ sees official cash rate at 1.59 pct in September 2019 (pvs 1.75 pct).

Sees official cash rate at 1.38 pct in June 2020 (pvs 1.81 pct).

Sees official cash rate at 1.36 pct in September 2020 (pvs 1.88 pct).

 Sees official cash rate at 1.93 pct in June 2022.

Sees TWI NZD at around 72.8 pct in June 2020 (pvs 71.9 pct).

Sees annual CPI 1.7 pct by June 2020 (pvs 2.0 pct).

Sees official cash rate at 1.59 pct in September 2019 (pvs 1.59 pct).

Sees official cash rate at 1.38 pct in June 2020 (pvs 1.38 pct).

Sees official cash rate at 1.36 pct in September 2020 (pvs 1.36 pct).

Sees official cash rate at 1.93 pct in June 2022 (pvs 1.93 pct).

Sees TWI NZD at around 72.8 pct in June 2020 (pvs 72.8 pct).

Sees annual CPI 1.7 pct by June 2020 (pvs 1.7 pct).