Wheeler in the press conference after his statement
- Inflation expectations seem to have stabilized
- Not much has changed since our previous OCR decision
- One further cut is built into our interest rate projections, but that could change
- You could end up with no cut or more cuts
- The economy is likely growing 2.5-3.0%
- Could put in macroprudential housing rules before year end, studying now
- Falling inflation expectations were a major reason why we cut in March, those have stabilized
- We felt at this stage that we don't need further monetary stimulus for the economy
- Output gap is basically closed now
- I don't want to give the impression that these decisions are driven by financial stability
- Young people think house prices will continue to go up
- We want to see house-price inflation slow significantly
- Daily turnover in NZD is approx. $1.05B per day
- We have a limited ability to influence currency
- Our rate decisions will be based on inflation (not NZD directly)
The market is pricing in a 60% chance of an August cut but that's sounding way too high. Wheeler sounds like he's leaning towards staying on the sidelines.
Assistant Governor McDermott is taking some questions too:
- We will have new inflation at the August meeting, when the picture will be much clearer
- We will be looking at consequences of high NZD on economy
