Local banks are expecting the RBNZ to raise the OCR in May 2022 now
Kiwibank has revised its call for a rate hike by the RBNZ from November 2022 to May 2022 now after the policy decision earlier, saying that the central bank was much more hawkish than anticipated but "we appreciate the clarity".
Adding that this introduces the risk of three rate hikes next year and that it is going to be a risk they reckon "is more likely to take the market from here".
Meanwhile, ASB Bank has also brought forward its call for an August 2022 rate hike to May 2022 now with plenty of upside potential in the NZ economy.
The firm says that they see considerable risk that the labour market performs better than the RBNZ forecasts and that inflation proves to be more sustained than it is transitory, with scope for the unemployment rate to also fall more sharply than anticipated.
That said, they argue that the pace of rate hikes would likely be more gradual than what the RBNZ may be planning for the time being.
