Finally, the Committee also noted that whether or not a monetary policy response would be required in response to future health related lockdowns would depend on whether there was a more enduring impact on inflation and employment. This will involve continuing to deepen our understanding of the persistent impacts on both demand and supply.
We are in a good position to navigate the period ahead, with the labour market operating at maximum sustainable employment, inflation expectations well-anchored at our target, and financial markets functioning well. Annex 1 outlines how the Committee’s least regrets evolved through time in relation to its assessment of the economic environment. Figure 5  Official Cash Rate projections  Source: RBNZ estimates.