Reserve Bank of New Zealand (RBNZ) Governor Anna Breman warned that misinformation could distort public beliefs about the economy and weaken monetary policy as central banks work to keep inflation expectations stable.
An Oct. 19 paper from the Bank for International Settlements (BIS) included Breman’s remarks from a June 26 central bank governors’ panel in Basel, Switzerland. Breman focused on how beliefs about future prices affect economic decisions and the response to inflation shocks.
She pointed to a gap in public understanding of the RBNZ’s role. In an unpublished 2026 survey she cited, fewer than 25% of New Zealanders spontaneously mentioned inflation or interest rates when asked about the RBNZ’s responsibilities. Just over half selected those responsibilities when later given options.
Keeping inflation expectations stable after a supply shock may reduce the policy tightening needed to contain inflation, Breman said. That could limit costs to output and employment. Expectations also influence the prices firms charge, wage bargaining and household decisions about saving and spending. Policymakers may still need to tighten when inflation pressure warrants it, she said.
Breman cited New Zealand’s adoption of an inflation target in 1989 while explaining the role expectations play in monetary policy. She said research has produced mixed findings on whether central bank communications directly change those expectations.
Reaching people through news and social media requires more study, she said. Breman also raised questions about how central banks should respond to misinformation produced with artificial intelligence, including deepfake videos and inaccurate search summaries. Easier production of misleading material adds to the challenge of maintaining public trust, she said.
Separately, Stats NZ is scheduled to release September-quarter inflation data Oct. 22. The RBNZ’s next Official Cash Rate review is set for Oct. 28.
