ANZ forecast 25bp RBNZ rate cuts in February, April, and May 2025.
In summary from the bank's analysis of today's RBNZ decision
- The RBNZ cut the Official Cash Rate (OCR) 50bp to 4.25% today in what the Record of Meeting notes was a consensus decision. The RBNZ’s updated forecast OCR track has about -40bp implied for the February MPS, with a slower pace thereafter down to around 3.0%, as before. A comment from the Governor at the press conference suggested that a 50bp cut in February is the baseline expectation.
- The RBNZ revised down their GDP forecast from the latter part of 2025 onwards. But at the same time, they were more pessimistic about the supply side, meaning their output gap forecast is slightly less negative and their non-tradable inflation forecast slightly higher.
- Our OCR forecast is unchanged: we continue to pencil in 25bp cuts in February, April and May, taking the OCR to 3.5%. As always, the speed and extent of easing will be highly data dependent, but that's particularly true given there is such a long gap to the next meeting. The odds of a 50bp cut in February have lifted, given the Governor’s comments, but the data between now and then will carry the day, and there are clear signs of a broad-based lift in activity (from a very weak starting point).
Earlier from NZ:
- RBNZ Gov says it's a misunderstanding that RBNZ projections show slower pace of rate cuts
- RBNZ Monetary Policy Statement Media Conference - live link
- What is the Reserve Bank of New Zealand even doing? This is a horror 'typo'/link
- New Zealand dollar has surged higher after the Reserve Bank of New Zealand 50bp rate cut
- Reserve Bank of New Zealand cuts cash rate by 50bp, as expected
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Reserve Bank of New Zealand meetings ahead:
