“To meet our core mandate of price stability, monetary policy can and should ensure that a near-term inflation spike does not turn into enduring inflationary pressures. “Our target is forward looking, meaning it is the medium-term outlook for inflation that guides our monetary policy decisions,” she said. “This means balancing higher near-term inflation and potentially higher inflation expectations against a weaker growth outlook. “Key to this balance, the duration of the shock is an important factor in considering the appropriate monetary policy response.”Breman’s speech tempered financial markets a little. Indeed, wholesale interest rates had risen sharply, prompting banks to lift some of their mortgage and term deposit rates.

Source: New Zealand Herald March 24, 2026 03:05 UTC