We were encouraged by this morning’s Financial Stability Report (FSR). It showed that the Reserve Bank is serious about protecting New Zealand’s financial system and, more to the point, is much more concerned about house price inflation than seemed the case previously. Yes, the Bank said it was seeing early evidence of its recently introduced LVR lending restrictions having an impact. But the big message of today’s FSR was surely of materially higher interest rates ahead. Brace yourself.
Read the full report: Economic Research
BNZ