
RBNZ Q2 sectoral factor inflation model at 2.8% y/y
The country's official statistics agency earlier in the day released figures that showed annual inflation came in at 2.7% in the second quarter, its highest in a year, leading markets to narrow the odds on a rate cut next month given weakness in the broader economy.
Both measures are closely watched by the RBNZ, which has a monetary policy goal of keeping inflation within its target range of 1% to 3%.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Reuters
10 hours ago
- Reuters
Ghana narrows fiscal deficit target after better-than-expected first half
ACCRA, July 24 (Reuters) - Ghana has narrowed its fiscal deficit target for 2025 after a better-than-expected first six months of the year, its finance minister said on Thursday, pledging to get public finances back on track. The West African country is emerging from its worst economic crisis in a generation, featuring turmoil in its cocoa and gold industries, a severe cost-of-living squeeze and a lengthy debt-restructuring process. But this year, key macroeconomic indicators have improved, with growth accelerating to 5.3% year-on-year in the first quarter and inflation falling to 13.7% in June, its lowest since 2021. The government now expects a fiscal deficit of 3.8% of Gross Domestic Product (GDP) this year, narrower than the 4.1% targeted in March, Finance Minister Cassiel Ato Forson told parliament during a mid-year review of public finances. In the first six months the deficit was 1.1% of GDP, ahead of the 2.4% targeted. Forson said economic growth could possibly exceed the March target of 4% and officials were hopeful they could hit the year-end inflation target of 11.9% ahead of schedule. "We have borrowed less than we planned, signifying strong expenditure control and fiscal discipline," Forson said. "This is a strong signal to the investor community and all stakeholders that the needed fiscal consolidation is happening here in Ghana and it will be sustained." In the first half of the year, total revenue and grants were roughly 3% short of target, but expenditure came in 14% below target. Forson said risks to the public purse included a shortfall in customs revenue, mounting wage pressures and smuggling of marine gas oil, adding Ghana was not out of the woods yet.


Reuters
11 hours ago
- Reuters
Fed working with White House to accommodate Trump's visit
July 24 (Reuters) - The Federal Reserve is working with the White House to accommodate President Donald Trump's unexpected visit to the U.S. central bank on Thursday, amid escalating tensions between the administration and the independent overseer of the nation's monetary policy. "The Federal Reserve is working with the White House to accommodate their visit," a Fed spokesperson said. Trump's visit to the Fed's headquarters in Washington, a rare appearance at the central bank by a U.S. president, was made public by the White House late on Wednesday. The president has repeatedly demanded that Powell slash U.S. interest rates and has frequently raised the possibility of firing him, though Trump has said he does not intend to do so. On Tuesday, Trump called the Fed chief a "numbskull." Trump will visit the Fed less than a week before the central bank's 19 policymakers gather for a two-day rate-setting meeting. They are widely expected to leave the central bank's benchmark interest rate in the 4.25%-4.50% range where it has been since December. The visit also is taking place as Trump battles to deflect attention from a political crisis over his administration's refusal to release files related to convicted sex offender Jeffrey Epstein, reversing a campaign promise. Epstein died in 2019. White House officials ramped up Trump's pressure campaign on Powell in recent weeks, accusing the Fed of mismanaging the renovation of two historic buildings in Washington and suggesting poor oversight and potential fraud. The White House's budget director, Russell Vought, has pegged the cost overrun at "$700 million and counting," and Treasury Secretary Scott Bessent called for an extensive review of the Fed's non-monetary policy operations, citing operating losses at the central bank as a reason to question its spending on the renovation. The Fed's operating losses stem from the mechanics of managing the policy rate to fight inflation, which include paying banks to park their cash at the central bank. The Fed reported a comprehensive net loss of $114.6 billion in 2023 and $77.5 billion in 2024, a reversal from years of big profits it turned over to the Treasury when interest rates - and inflation - were low. The Fed, in letters to Vought and lawmakers backed up by documents posted on its website, says the project - the first full rehab of the central bank's two buildings in Washington since they were built nearly a century ago - ran into unexpected challenges including toxic materials abatement and higher-than-estimated materials and labor costs. The White House's deputy chief of staff, James Blair, said this week that administration officials would be visiting the Fed on Thursday. Senate Banking Committee Chair Tim Scott, who has also raised questions about the buildings, will join the visit as well. In a schedule released to the media on Wednesday night, the White House said Trump would visit the Fed at 4 p.m. EDT (2000 GMT) on Thursday. It did not say whether Trump would meet with Powell. Market reaction to Trump's visit was subdued. The yield on benchmark 10-year Treasury bonds ticked higher after data showed new jobless claims dropped in the most recent week, signaling a stable labor market not in need of support from a Fed rate cut. Stocks on Wall Street were trading higher. Trump's public criticism of Powell and flirtation with firing him have previously upset financial markets and threatened a key underpinning of the global financial system - that central banks are independent and free from political meddling. His visit, against the backdrop of his antipathy for Powell, contrasts with a handful of documented previous presidential visits, including most recently former President George W. Bush's swearing-in of former Fed Chair Ben Bernanke. Republican Senator Mike Rounds on Thursday said it's critical that Powell maintains his independence, but saw no problem with Trump's visit. "I think the more information the president can glean from this, probably the better off we are in terms of resolving any issues that are outstanding," Rounds said, noting that Powell had indicated "that they have had a significant amount of money, just in terms of foundation work and so forth, that was not anticipated to begin with." "I think he has to maintain his independence," Rounds said about Powell's role. "That's critical for the markets. I think he's done a good job of that."


Reuters
11 hours ago
- Reuters
ECB policymakers set high bar for Sept rate cut, sources say
FRANKFURT, July 24 (Reuters) - European Central Bank policymakers are setting a high bar for an interest rate cut in September and they would need to see a significant deterioration in growth and inflation before backing further easing, two sources told Reuters. The European Central Bank left interest rates unchanged on Thursday after cutting eight times in a year, biding its time while Brussels and Washington try to negotiate a trade deal that could ease persistent uncertainty over tariffs. But sources at the meeting said that policymakers would not be spurred into action by the mere announcement of U.S. duties on European Union imports. Instead, they would need to see an actual weakening in the inflation and growth data as well as lower projections from ECB staff in September if they are to back a rate cut. An ECB spokesperson declined to comment. While the discussion on Thursday was harmonious, a few policymakers wanted to send out a warning about inflation coming in lower than expected. Instead, the ECB said that risks to economic growth were "tilted to the downside" while "the outlook for inflation (was) more uncertain than usual". ECB President Christine Lagarde hinted at this division, saying that, while the decision to keep rates on hold was unanimous, the risk assessment was "broadly shared". The sources said that policymakers mostly agreed on how the economy would behave in the ECB's baseline scenario, in which the U.S. administration imposes a 10% tariff rate on European Union imports. But they differed about the adverse scenario, in which the tariff rate is higher. Policy hawks, who favour higher interest rates, saw risks that inflation would get a boost from supply disruptions related to tariffs and possible retaliation. Doves saw downside risks from slower economic activity prevailing. Lagarde, who said her job was to present the view of the Governing Council rather than her own, listed both types of risks in her news conference.