Podcast Appearances
I mean, the Reserve Bank has their own measures of what they deem to be core inflation.
Stats New Zealand puts out a couple of measures which they have a name for.
They don't necessarily call it core inflation.
But you're right, in the end, it amounts to kind of taking out stuff that's a bit jumpy, a bit volatile, one-offs, things like that.
So it allows the Reserve Bank to look at sort of a trend measure, if you like, the sort of underlying level of price pressures in the economy.
And that's sort of what matters because, you know, keep in mind their inflation target is over the medium term.
So they're allowed to so-called look through little spikes in inflation for various different things.
And, you know, they can focus on their more medium-term picture
the underlying trend.
And for me also, it's worth keeping in mind that it is a medium term thing.
It's very easy to forget about.
At a certain point in time, everyone's focusing on, oh, well, don't worry, inflation reacts with lags.
So monetary policy works with a lag.
We'll wait for the lags to work through.
Just at the moment, it feels like some of the commentary has forgotten about that.
And, you know, we're all going, oh, 3.1%, it's above target.
Well, gee, you know, let's all sort of start panicking.
Keep in mind there's still lags in the system and it takes a while to flow through.
So, yeah, I'd keep that in mind too.
Now, I need to come back to my overall conclusion on all of that.