RBNZ’s Conway sees economic slack shaping response to oil shock

Reserve Bank of New Zealand Chief Economist Paul Conway said that the central bank sees lingering slack in the economy that will shape how aggressively it responds to the inflationary aftershocks of higher oil prices, Bloomberg reported on Wednesday. Reserve Bank of New Zealand Chief Economist Paul Conway said that the central bank sees lingering slack in the… Reserve Bank of New Zealand Chief Economist Paul Conway said that the central bank sees lingering slack in the economy that will shape how aggressively it responds to the inflationary aftershocks of higher oil prices, Bloomberg reported on Wednesday. Reserve Bank of New Zealand Chief Economist Paul Conway said that the central bank sees lingering slack in the economy that will shape how aggressively it responds to the inflationary aftershocks of higher oil prices, Bloomberg reported on Wednesday.Key quotesWe think there is still excess capacity in the economy, so the output gap is still negative. You see that across a bunch of indicators, including unemployment at 5.3%.Will run its… For traders, this matters because commodity headlines often feed directly into inflation expectations, sector rotation and currency pricing. Watch follow-through, not just the first reaction: liquidity, volatility and confirmation across related assets usually tell the real story.