Reserve Bank of New Zealand Assistant Governor: If data shows second-round inflation effects appearing, more aggressive rate hikes will be considered
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Golden Ten Data, May 29 – Reserve Bank of New Zealand Assistant Governor Silk stated that the central bank has not yet seen signs of medium-term inflationary pressures but is prepared to respond actively should they emerge. "At the moment, there are no early indications that this will necessarily develop into very strong second-round effects," Silk said in an interview in Wellington on Friday. "Therefore, the key question is: When do you start raising rates? And to what extent can weaker economic growth offset and suppress medium-term inflationary pressures?" Silk noted that all options are on the table, including a more aggressive 50 basis point rate hike. "If the data changes and shows that second-round effects are indeed emerging, and the situation becomes much worse, then you always keep that option," she added. Conversely, if the data supports it, maintaining an unchanged decision is also possible, she stated.
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