Earlier:

I'm glad I got my forecast the right way! RBNZ Governor Orr doesn't wait around for a bazillion confirmations, he just goes and gets it done. A bit like Wheeler before him:

Reserve Bank of New Zealand from the statement:

  • sees official cash rate at 4.1% in September 2025 (pvs 5.4%)
  • sees TWI NZD at around 69.5% in September 2025 (pvs 71.0%)
  • sees official cash rate at 4.92% in December 2024 (pvs 5.65%)
  • sees official cash rate at 3.85% in December 2025 (pvs 5.14%)
  • sees annual CPI 2.4% by September 2025 (pvs 2.2%)
  • sees official cash rate at 2.98% in September 2027
  • Inflation is declining
  • Inflation returning into target band
  • Service inflation expected to decline
  • Pace of further easing will depend on commitee's confidence that pricing behaviour remains consistent with a low inflation environment
  • CPI expected to remain target mid-point over foreseeable future

RBNZ from the meeting minutes:

  • Weakening in domestic economic activity observed in the July Monetary Policy Review has become more pronounced and broad-based
  • Members noted that monetary policy will need to remain restrictive for some time to ensure that domestic inflationary pressures continue to dissipate
  • New Zealand's economic activity and near-term inflation indicators now resemble those in countries in which central banks have started cutting policy rates
  • The pace of further easing will thus be conditional on the Committee's confidence that pricing behaviour is continuing to adapt to a low-inflation environment
  • A broad range of high-frequency indicators point to a material weakening in domestic economic activity in recent months
  • Recent indicators give confidence that inflation will return sustainably to target within a reasonable time frame
  • The output gap is now assessed to be more negative than was assumed in the May Monetary Policy Statement, indicating increased spare capacity
  • Headline CPI inflation expected to return to the target band in the September quarter
  • Committee agreed there was scope to temper the extent of monetary policy restraint
  • Alongside restrictive monetary policy, an earlier or larger impact of tighter fiscal policy could be constraining domestic demand
  • The Committee observed that the balance of risks has progressively shifted since the May Monetary Policy Statement
  • While domestic financial conditions remain restrictive, they have loosened over recent months
  • Broad range of indicators suggesting the economy is contracting faster than anticipated
  • Committee felt that the OCR track in the projection reflected its view on the policy strategy that would best deliver on its remit

The Bank quick to update its front page:

rbnz website cash rate cut 2