OCR Special: Vigilance, ceasefires, and the pre-emptive threat

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The RBNZ keeps the OCR at 2.25%, but with inflation forecasts shifting to 4.2% for June, the wait and see period has a very clear focus on rising costs.

In this special reactionary episode, Nick Goodall and Kelvin Davidson break down today’s Reserve Bank (RBNZ) Monetary Policy Review. While the decision to hold the Official Cash Rate (OCR) at 2.25% was widely expected, the focus has shifted to the Bank's updated inflation outlook and the impact of the newly announced two-week ceasefire in Iran.

We discuss how the RBNZ is balancing the risk of a stuttering economy against the potential for rising wages and transport costs to keep inflation higher for longer. With the June quarter inflation forecast now sitting at 4.2%, we look at what this means for the timing of any future moves and the immediate outlook for mortgage holders.

This week, we discuss:

• The OCR decision: Why the 2.25% hold was the only move for today.
• Ready to move: The RBNZ’s signal that they won't hesitate to act if they see price increases becoming embedded.
• Revised inflation forecasts: Breaking down the shift from 2.7% to 4.2% for the June quarter.
• Interest rate strategy: Why the bottom for mortgage rates is likely behind us and what to consider when your fix comes up.
• The election year factor: Could the Government step in with fiscal support if the economy enters another recession?

Sign up for news and insights or contact on LinkedIn, X @NickGoodall_CL or @KDavidson_CL and email ngoodall@cotality.com or kdavidson@cotality.com

This podcast is for educational and entertainment purposes only and does not constitute financial, legal, or tax advice. The hosts are not licensed Financial Advice Providers in New Zealand. All information is of a general nature and does not take into account your personal situation or goals. Please consult a qualified professional before making any financial decisions.