Economic news

Trump’s policies may pose medium-term risk to inflation, New Zealand central bank official says

2024.11.27 18:04

By Lucy Craymer and Renju Jose

WELLINGTON (Reuters) – A top New Zealand central banker said on Thursday that U.S. President-elect Donald Trump’s economic policies could pose a medium-term risk to inflation though the bank had not conducted any formal modelling on potential impacts.

Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway said Trump’s policy agenda could result in higher prices and so there could be “more inflation volatility going forward”.

“We can’t foresee what President-elect Trump, I mean he talks a lot, but what is going to actually be put into place would be remiss of us to be sort of reacting. We’d be boxing at shadows currently,” Conway told a parliamentary committee.

Trump has pledged a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China – the United States’ three largest trading partners – on his first day in office in January.

The tariffs could lead to a global trade war and may impact the New Zealand economy as the country relies heavily on trade, which accounts for 54% of its gross domestic product.

RBNZ Deputy Governor Christian Hawkesby said the central bank will test scenarios “that could play out in more extreme cases” and check how resilient the economy would be when exposed to severe stress.

The central bank on Wednesday cut rates for a third time in four months and flagged more substantial easing, including a likely half percentage point reduction in February, as the economy slows and inflation moderated to around its target.

Economic growth is expected to recover during 2025, the RBNZ forecast, as lower interest rates are expected to revive house prices, and encourage investment and other spending.

© Reuters. FILE PHOTO: Republican presidential nominee and former U.S. President Donald Trump takes the stage following early results from the 2024 U.S. presidential election in Palm Beach County Convention Center, in West Palm Beach, Florida, U.S., November 6, 2024. REUTERS/Callaghan O'Hare/File Photo

Though house prices are “notoriously difficult” to predict, the RBNZ expects prices to rise 6.8% next year due to the recent cuts in interest rates, Conway said.

“I should say we’re not forecasting a boom in house prices … but we do see a little bit more life coming into the housing market than what we’ve seen over recent years.”



Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 84,064.52 1.36%
ethereum
Ethereum (ETH) $ 1,936.82 2.39%
tether
Tether (USDT) $ 1.00 0.01%
xrp
XRP (XRP) $ 2.35 1.42%
bnb
BNB (BNB) $ 624.10 3.74%
solana
Solana (SOL) $ 128.88 1.21%
usd-coin
USDC (USDC) $ 1.00 0.00%
cardano
Cardano (ADA) $ 0.720457 2.72%
dogecoin
Dogecoin (DOGE) $ 0.173858 2.84%
tron
TRON (TRX) $ 0.220097 3.38%
staked-ether
Lido Staked Ether (STETH) $ 1,934.94 2.65%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 83,851.47 1.16%
pi-network
Pi Network (PI) $ 1.35 3.01%
leo-token
LEO Token (LEO) $ 9.78 2.49%
chainlink
Chainlink (LINK) $ 14.12 5.06%
the-open-network
Toncoin (TON) $ 3.47 1.25%
stellar
Stellar (XLM) $ 0.274319 3.46%
usds
USDS (USDS) $ 1.00 0.02%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,317.26 2.71%
hedera-hashgraph
Hedera (HBAR) $ 0.192379 4.53%
avalanche-2
Avalanche (AVAX) $ 18.83 2.46%
shiba-inu
Shiba Inu (SHIB) $ 0.000013 2.08%
sui
Sui (SUI) $ 2.34 4.52%
litecoin
Litecoin (LTC) $ 92.87 2.84%
mantra-dao
MANTRA (OM) $ 7.00 3.39%
polkadot
Polkadot (DOT) $ 4.42 2.37%
bitcoin-cash
Bitcoin Cash (BCH) $ 337.99 1.10%
ethena-usde
Ethena USDe (USDE) $ 0.999759 0.04%
weth
WETH (WETH) $ 1,934.58 2.20%
bitget-token
Bitget Token (BGB) $ 4.44 1.45%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.19%
hyperliquid
Hyperliquid (HYPE) $ 13.44 0.92%
whitebit
WhiteBIT Coin (WBT) $ 28.52 0.48%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,055.69 2.26%
monero
Monero (XMR) $ 210.89 0.35%
uniswap
Uniswap (UNI) $ 6.33 2.95%
susds
sUSDS (SUSDS) $ 1.04 0.10%
aptos
Aptos (APT) $ 5.37 4.08%
dai
Dai (DAI) $ 0.999845 0.02%
near
NEAR Protocol (NEAR) $ 2.64 5.09%
pepe
Pepe (PEPE) $ 0.000007 12.16%
okb
OKB (OKB) $ 50.82 3.89%
internet-computer
Internet Computer (ICP) $ 6.01 7.19%
mantle
Mantle (MNT) $ 0.817187 0.88%
ethereum-classic
Ethereum Classic (ETC) $ 18.12 3.65%
ondo-finance
Ondo (ONDO) $ 0.867123 5.84%
gatechain-token
Gate (GT) $ 21.97 3.09%
tokenize-xchange
Tokenize Xchange (TKX) $ 33.57 12.34%
aave
Aave (AAVE) $ 176.31 6.47%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 84,018.51 1.28%