RBNZ will raise rates again in June and then pause until September, according to Westpac

Westpac’s latest note to clients on the RBNZ outlook:

• Says the RBNZ will raise rates again in June and then pause until September, and then another hike in December
• Westpac chief economist in New Zealand says the change in their outlook is due to the high NZ dollar, weak inflation data and weak Q1 employment data
• “Our longer-term interest rate views have been broadly unchanged since May 2013, and so they remain. To control the inflationary pressures emanating from the Canterbury rebuild and recent house price inflation, we believe the RBNZ will have to hike the OCR substantially over the coming three years. However, we have tweaked our forecast of the peak OCR down to 5.25%, instead of 5.5%”

(WPAC had previously expected RBNZ rate rises in June and July)