Stagflation Looms As Central Bankers Party Amid Peak Uncertainty!

Today we discuss the upcoming Jackson Hole Bun Fight and New Zealand Reserve Bank Decision to cut rates and I will argue that the whiff of stagflation is getting stronger, to the detriment of ordinary households and businesses. The RBNZ cut the OCR by 25bp, citing tighter spending by businesses and households, falling home prices and uncertainty in the outlook for global economic policy despite the real risk of inflation running above 3%, high than their target. They now think the current rate is around neutral. An easing bias was maintained. The policy assessment maintained the key last sentence: “If […]