New Zealand Q2 CPI Rises 0.5% QoQ, 2.7% YoY; RBNZ's Conway Signals Possible Further Rate Cuts

New Zealand's consumer price index (CPI) for the second quarter of 2025 showed a 0.5% increase quarter-on-quarter, slightly below the estimated 0.6% and down from the previous quarter's 0.9%. On a year-over-year basis, CPI rose 2.7%, just under the forecasted 2.8% but higher than the prior 2.5%. Tradable prices increased by 0.3% quarter-on-quarter, below the 0.5% estimate, while non-tradable prices rose 0.7%, matching expectations but down from 1.1% previously. Following the release of the CPI data, New Zealand's two-year government bond yield declined by 3 basis points. The Reserve Bank of New Zealand's (RBNZ) Sectoral Factor Inflation Model also indicated a 2.8% year-over-year inflation increase in Q2. RBNZ Governor Paul Conway stated that the CPI data aligns with the bank's predictions and indicated that further interest rate cuts are possible if inflation continues to moderate, signaling a potential easing of monetary policy.